Rapid7, Inc. logo RPD - Rapid7, Inc.

Price: -- -- | CONSENSUS: Hold DETAILS
STRONG
BUY
0
BUY 16
HOLD 19
SELL 2
STRONG
SELL
0
| PRICE TARGET: $8.50 DETAILS
HIGH: $12.00
LOW: $6.00
MEDIAN: $8.00
CONSENSUS: $8.50
DOWNSIDE: 30.16%
AlphaVal

AlphaVal

Deterministic, archetype-aware fair value

Platform & Compounding FCF 85% confidence

Primary model: Two-stage FCF DCF

Valuation Signal Overvalued Strong
Trading 113.8% above fair value
Current Price $12.17
Bear Case $5.69 53.2% downside ($5.69 - $12.17) / $12.17 = -53.2% 3% stage 1 growth, 11% discount
Fair Value $5.69 53.2% downside ($5.69 - $12.17) / $12.17 = -53.2% 3% stage 1 growth, 11% discount
Bull Case $6.78 44.3% downside ($6.78 - $12.17) / $12.17 = -44.3% 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 20.6x
Market is pricing in (growth) 9.4% vs our 3.0% base

Plain-Language Summary

Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $8.50 from 37 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $5.69 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 $8.50 (from 37 analysts). Our estimate is 47% 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