Rubrik Upgraded to Sector Outperform with $70 Target by Scotiabank
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jul 18 2024
0mins
Source: Benzinga
Rubrik Inc. experienced a price decline of 8.06% and hit a 5-day low amid broader market weakness, with the Nasdaq-100 down 0.29% and the S&P 500 down 0.14%.
Scotiabank upgraded Rubrik to a Sector Outperform rating with a $70 price target, reflecting analysts' optimism about its potential market share growth in cybersecurity. This upgrade highlights Rubrik's security-first architecture, which has gained recognition from CISOs and CIOs, indicating a competitive edge in backup and data protection. Analysts believe there is significant room for growth in 2026 and beyond, enabling the company to secure more mission-critical deals.
The upgrade from Scotiabank may provide a positive outlook for Rubrik, suggesting that despite the current price drop, there is potential for recovery and growth in the cybersecurity sector.
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Analyst Views on RBRK
Wall Street analysts forecast RBRK stock price to rise
20 Analyst Rating
19 Buy
1 Hold
0 Sell
Strong Buy
Current: 78.630
Low
95.00
Averages
111.22
High
130.00
Current: 78.630
Low
95.00
Averages
111.22
High
130.00
About RBRK
Rubrik, Inc. is a cloud data management company. The Company has developed Zero Trust Data Security platform. It helps organizations achieve business resilience against cyberattacks, malicious insiders, and operational disruptions. Its Rubrik Security Cloud (RSC) secures data across enterprise, cloud, and software-as-a-service (SaaS) application. RSC detects, analyzes, and remediates data security risks and unauthorized user activities. It has developed a proprietary machine learning and artificial intelligence-based data threat monitoring and management engine to surface anomalous activities and indicators of data breaches. In addition, the Company offers Ruby for artificial intelligence (AI) data defense and recovery. Ruby is designed to help customers scale their data security operations with automation, boosting productivity, and bridging the users’ skills gap.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Solution Launch: Sophos and Rubrik's newly available backup and recovery solution enables customers to rapidly recover Microsoft 365 data, enhancing their ability to respond to ransomware and accidental deletions, thereby strengthening overall cybersecurity defenses.
- Integrated Platform Benefits: The solution is integrated within Sophos Central, allowing security teams to manage threat response and data recovery on a single platform, streamlining operations and reducing reliance on multiple tools, which improves operational efficiency.
- Key Feature Enhancements: It offers secure, immutable backups and fast, flexible recovery options, ensuring data protection even in cases of credential compromise, supporting recovery across multiple services including Exchange Online and OneDrive.
- Market Demand Response: Serving over 600,000 customers, Sophos's new solution not only meets the urgent need for rapid recovery of Microsoft 365 data but also enhances business continuity and trust through improved recovery capabilities.
See More
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- Investor Confidence in Okta: Okta achieved a record 30% gain on Friday, with better-than-expected results indicating that businesses are ramping up investments in identity security tools to combat the rising threat of bot attacks as they transition to agentic AI.
- ETF Performance Surge: The iShares Expanded Tech-Software ETF rose 8% this week and is up 21% for May, marking its best monthly performance since October 2001, signaling a gradual recovery of market confidence in the software sector.
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- Strong Demand Trends: BTIG analyst Gray Powell noted that Rubrik's demand trends were described as healthy to strong during discussions with four partners, particularly showing an uptick in April, indicating the company's sustained market appeal.
- Market Share Gains: Rubrik continues to gain significant market share against legacy backup vendors, demonstrating increasing recognition and competitiveness of its products among clients, which may further drive revenue growth.
- Limited Cost Impact: Despite rising memory prices raising investor concerns, analysis suggests that this factor has a limited impact on purchasing decisions, with total deployment cost effects expected to remain in the low to mid-single digits, thus not hindering customer buying intentions.
- Upward Guidance Expectations: BTIG anticipates that Rubrik will exceed the market's annual recurring revenue (ARR) estimate of $1.547 billion and may raise its full-year guidance in the upcoming earnings report, reflecting the company's strong growth potential.
See More
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- Significant Demand Recovery: Oppenheimer upgraded Rubrik from Perform to Outperform, highlighting a strong recovery in backup and recovery demand, with the quarterly score rising from negative 0.15 to positive 0.98, indicating renewed market confidence.
- Pricing Strategy Optimization: Analysts noted that current component pricing for backup and recovery is not impacting demand, reflecting the company's strengthening competitive position, which is expected to drive future performance growth.
- Attractive Valuation: Rubrik is currently trading at 6.3x FY+2 EV/Sales, below the 12-month average of 9.0x, indicating that the stock is undervalued and the market is likely to return to its normal trading multiples.
- Earnings Report Expectations: Rubrik plans to release its Q1 FY2027 earnings report on June 4, with analysts expecting an adjusted loss per share of $0.03 on revenue of $366.3 million, reflecting cautious optimism about the company's future growth.
See More
Latest Wall Street Rating Updates
- Goldman Sachs Reiterates Buy on Broadcom: Goldman raised Broadcom's price target from $480 to $500, anticipating strong CapEx spending patterns from key customers, indicating that the upcoming earnings report may exceed market expectations.
- Oppenheimer Upgrades Rubrik: Oppenheimer upgraded Rubrik from Perform to Outperform with a price target of $85, based on strong checks from value-added resellers, highlighting the product's competitive strength in the market.
- UBS Upgrades Packaging Corp: UBS upgraded Packaging Corp from Neutral to Buy, expecting the $50/ton price hike to stick, which, combined with high utilization and prior capacity cuts, could add approximately $290 million in annualized EBITDA.
- Deutsche Bank Upgrades Humana: Deutsche Bank believes there is still time to buy shares of Humana, upgrading its rating to Buy, as it anticipates a new rally in managed care organizations that is just beginning.
See More
Tech Stocks Poised for Future Growth
- Rubrik's Market Leadership: Rubrik has been named a leader in the backup and data protection space by Gartner for six consecutive years, with 2022 revenue reaching $1.26 billion, a 53% year-over-year increase, and is expected to achieve a small profit this year, showcasing its strong competitiveness in the rapidly growing cybersecurity market.
- Nice's AI Customer Service Innovation: Nice leverages AI to automate customer service, handling over 20 billion customer interactions annually, with 2022 revenue nearing $3 billion and projected earnings per share between $10.85 and $11.05 this year, indicating its leadership position and future growth potential in the CCaaS industry.
- Nebius's Cloud Computing Outlook: Nebius specializes in AI infrastructure and, despite currently being unprofitable, has distinguished itself through major partnerships with Microsoft and Meta, with analysts projecting over 500% revenue growth this year to $3.3 billion, highlighting its significant potential in the AI infrastructure market.
- Industry Growth Trends: According to Precedence Research, the global cybersecurity market is expected to grow at an average annual rate of nearly 13% through 2034, while the AI infrastructure market is projected to grow at an annualized pace of 23%, providing vast market opportunities for companies like Rubrik, Nice, and Nebius.
See More
Sophos Launches Rubrik-Powered Backup and Recovery Solution
- Solution Launch: Sophos and Rubrik's newly available backup and recovery solution enables customers to rapidly recover Microsoft 365 data, enhancing their ability to respond to ransomware and accidental deletions, thereby strengthening overall cybersecurity defenses.
- Integrated Platform Benefits: The solution is integrated within Sophos Central, allowing security teams to manage threat response and data recovery on a single platform, streamlining operations and reducing reliance on multiple tools, which improves operational efficiency.
- Key Feature Enhancements: It offers secure, immutable backups and fast, flexible recovery options, ensuring data protection even in cases of credential compromise, supporting recovery across multiple services including Exchange Online and OneDrive.
- Market Demand Response: Serving over 600,000 customers, Sophos's new solution not only meets the urgent need for rapid recovery of Microsoft 365 data but also enhances business continuity and trust through improved recovery capabilities.
See More
Software Stocks Rally as Snowflake and Okta Report Strong Results
- Snowflake's Strong Performance: Snowflake saw a nearly 50% increase over four trading days following the holiday, announcing a $6 billion cloud and chip deal with Amazon, which reflects a surge in customer demand for AI tools and boosts the company's earnings guidance.
- Investor Confidence in Okta: Okta achieved a record 30% gain on Friday, with better-than-expected results indicating that businesses are ramping up investments in identity security tools to combat the rising threat of bot attacks as they transition to agentic AI.
- ETF Performance Surge: The iShares Expanded Tech-Software ETF rose 8% this week and is up 21% for May, marking its best monthly performance since October 2001, signaling a gradual recovery of market confidence in the software sector.
- Overall Industry Recovery: Companies like Atlassian and ServiceNow saw increases of 26% and over 20%, respectively, indicating a clear recovery trend in the software industry driven by partnerships with AI, despite Microsoft still being down nearly 7% year-to-date.
See More
Rubrik (RBRK) Receives Buy Rating from BTIG Amid Positive Demand Signals
- Strong Demand Trends: BTIG analyst Gray Powell noted that Rubrik's demand trends were described as healthy to strong during discussions with four partners, particularly showing an uptick in April, indicating the company's sustained market appeal.
- Market Share Gains: Rubrik continues to gain significant market share against legacy backup vendors, demonstrating increasing recognition and competitiveness of its products among clients, which may further drive revenue growth.
- Limited Cost Impact: Despite rising memory prices raising investor concerns, analysis suggests that this factor has a limited impact on purchasing decisions, with total deployment cost effects expected to remain in the low to mid-single digits, thus not hindering customer buying intentions.
- Upward Guidance Expectations: BTIG anticipates that Rubrik will exceed the market's annual recurring revenue (ARR) estimate of $1.547 billion and may raise its full-year guidance in the upcoming earnings report, reflecting the company's strong growth potential.
See More
Rubrik Upgraded to Outperform by Oppenheimer Amid Recovery in Demand
- Significant Demand Recovery: Oppenheimer upgraded Rubrik from Perform to Outperform, highlighting a strong recovery in backup and recovery demand, with the quarterly score rising from negative 0.15 to positive 0.98, indicating renewed market confidence.
- Pricing Strategy Optimization: Analysts noted that current component pricing for backup and recovery is not impacting demand, reflecting the company's strengthening competitive position, which is expected to drive future performance growth.
- Attractive Valuation: Rubrik is currently trading at 6.3x FY+2 EV/Sales, below the 12-month average of 9.0x, indicating that the stock is undervalued and the market is likely to return to its normal trading multiples.
- Earnings Report Expectations: Rubrik plans to release its Q1 FY2027 earnings report on June 4, with analysts expecting an adjusted loss per share of $0.03 on revenue of $366.3 million, reflecting cautious optimism about the company's future growth.
See More
Latest Wall Street Rating Updates
- Goldman Sachs Reiterates Buy on Broadcom: Goldman raised Broadcom's price target from $480 to $500, anticipating strong CapEx spending patterns from key customers, indicating that the upcoming earnings report may exceed market expectations.
- Oppenheimer Upgrades Rubrik: Oppenheimer upgraded Rubrik from Perform to Outperform with a price target of $85, based on strong checks from value-added resellers, highlighting the product's competitive strength in the market.
- UBS Upgrades Packaging Corp: UBS upgraded Packaging Corp from Neutral to Buy, expecting the $50/ton price hike to stick, which, combined with high utilization and prior capacity cuts, could add approximately $290 million in annualized EBITDA.
- Deutsche Bank Upgrades Humana: Deutsche Bank believes there is still time to buy shares of Humana, upgrading its rating to Buy, as it anticipates a new rally in managed care organizations that is just beginning.
See More
Tech Stocks Poised for Future Growth
- Rubrik's Market Leadership: Rubrik has been named a leader in the backup and data protection space by Gartner for six consecutive years, with 2022 revenue reaching $1.26 billion, a 53% year-over-year increase, and is expected to achieve a small profit this year, showcasing its strong competitiveness in the rapidly growing cybersecurity market.
- Nice's AI Customer Service Innovation: Nice leverages AI to automate customer service, handling over 20 billion customer interactions annually, with 2022 revenue nearing $3 billion and projected earnings per share between $10.85 and $11.05 this year, indicating its leadership position and future growth potential in the CCaaS industry.
- Nebius's Cloud Computing Outlook: Nebius specializes in AI infrastructure and, despite currently being unprofitable, has distinguished itself through major partnerships with Microsoft and Meta, with analysts projecting over 500% revenue growth this year to $3.3 billion, highlighting its significant potential in the AI infrastructure market.
- Industry Growth Trends: According to Precedence Research, the global cybersecurity market is expected to grow at an average annual rate of nearly 13% through 2034, while the AI infrastructure market is projected to grow at an annualized pace of 23%, providing vast market opportunities for companies like Rubrik, Nice, and Nebius.
See More
