RPD
Rapid7, Inc.
$17.93
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 199.2% above fair value
You pay
$17.93
Bear
$5.99
Fair
$5.99
Bull
$6.95
Bear
$5.99
-66.6%
3% stage 1 growth, 11% discount
Fair
$5.99
-66.6%
3% stage 1 growth, 11% discount
Bull
$6.95
-61.2%
4% stage 1 growth, 11% discount
Adjust Assumptions
3.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (3% base case)
Terminal Value % of EV
33%
Implied Market Multiple
23.7x
Market is pricing in (growth)
11.3%
vs 3.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$11.65
Divergence from AlphaVal
49%
Summary
Using a two-stage FCF DCF with 3% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $5.99 per share.
Warnings
Stock-based employee pay equals 446% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $11.65 (from 37 analysts). Our estimate is 49% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions