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The underperformance can be attributed to strong competition from data management and protection vendors such as Cohesity, Commvault, Veeam, International Business Management (IBM - Free Report) and Dell EMC.
However, Rubrik’s growing client base and increased demand for its data security solutions will help the company fend off competition from other industry players who are also making strong efforts in the data security market.
Hence, investors should ask this question — is the dip the right time to invest in RBRK stock?
Can Strong Portfolio & Partner Base Aid RBRK’s Prospects?
In second-quarter fiscal 2025, subscription revenues surged 50% year over year to $191.3 million, fueled by strong momentum from a robust partner network and the growing adoption of its solutions.
Rubrik’s subscription Annual Recurring Revenue (ARR) reached $919 million, marking 40% year-over-year growth in second-quarter fiscal 2025. The upside can be attributed to adding new customers and expanding relationships with existing ones.
The company’s expanding clientele, which includes major industry players like PureStorage (PSTG - Free Report) , Alphabet’s (GOOGL - Free Report) cloud business, Google Cloud and CrowdStrike, has been a key catalyst.
In September, Rubrik partnered with Pure Storage to enhance Cyber Resilience through a three-layered defense strategy that combines primary storage, data security and long-term retention using Rubrik Security Cloud.
In August, the company announced a partnership with Mandiant, a division of Alphabet’s Google Cloud, aimed at integrating threat intelligence and improving cyber recovery capabilities to bolster organizations' defenses against data breaches and ransomware attacks.
Rubrik’s expansion in cloud services has been noteworthy. In the second quarter of fiscal 2025, the company achieved $678 million in cloud ARR, which is an 80% year-over-year increase. RBRK’s ability to deliver cloud-native solutions played a vital role in its overall growth, positioning Rubrik as a leader in the data management and security space.
RBRK Q3 Guidance Positive
For third-quarter fiscal 2025, RBRK expects revenues to be between $216.5 million and $218.5 million. Non-GAAP earnings are expected to range from a loss of 40 cents to 46 cents per share.
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $217.64 million. The consensus mark for earnings is currently pegged at a loss of 40 cents per share, implying a decline of 1.4% in the past 30 days.
What Investors Should Do With RBRK Stock?
Despite Rubrik’s strong demand for its data security solutions and growing client base, intense competition in the cyber resilience market and macroeconomic challenges are expected to impact RBRK’s top-line growth in fiscal 2025.
IBM’s partnership with Palo Alto Networks further highlights Rubrik’s competitive pressures in the market. By leveraging AI-powered security solutions, IBM aims to enhance its cybersecurity services, improving data security and identity management.
The stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
Rubrik currently carries Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present.
Image: Bigstock
Rubrik Plunges 13% YTD: How Should Investors Play the Stock?
Rubrik (RBRK - Free Report) shares have lost 13.1% in the year-to-date period compared with the broader Zacks Computer and Technology sector’s return of 23.7% and the Zacks Internet - Software sector’s rise of 21.2%.
The underperformance can be attributed to strong competition from data management and protection vendors such as Cohesity, Commvault, Veeam, International Business Management (IBM - Free Report) and Dell EMC.
However, Rubrik’s growing client base and increased demand for its data security solutions will help the company fend off competition from other industry players who are also making strong efforts in the data security market.
Hence, investors should ask this question — is the dip the right time to invest in RBRK stock?
Rubrik, Inc. Price and Consensus
Rubrik, Inc. price-consensus-chart | Rubrik, Inc. Quote
Can Strong Portfolio & Partner Base Aid RBRK’s Prospects?
In second-quarter fiscal 2025, subscription revenues surged 50% year over year to $191.3 million, fueled by strong momentum from a robust partner network and the growing adoption of its solutions.
Rubrik’s subscription Annual Recurring Revenue (ARR) reached $919 million, marking 40% year-over-year growth in second-quarter fiscal 2025. The upside can be attributed to adding new customers and expanding relationships with existing ones.
The company’s expanding clientele, which includes major industry players like PureStorage (PSTG - Free Report) , Alphabet’s (GOOGL - Free Report) cloud business, Google Cloud and CrowdStrike, has been a key catalyst.
In September, Rubrik partnered with Pure Storage to enhance Cyber Resilience through a three-layered defense strategy that combines primary storage, data security and long-term retention using Rubrik Security Cloud.
In August, the company announced a partnership with Mandiant, a division of Alphabet’s Google Cloud, aimed at integrating threat intelligence and improving cyber recovery capabilities to bolster organizations' defenses against data breaches and ransomware attacks.
Rubrik’s expansion in cloud services has been noteworthy. In the second quarter of fiscal 2025, the company achieved $678 million in cloud ARR, which is an 80% year-over-year increase. RBRK’s ability to deliver cloud-native solutions played a vital role in its overall growth, positioning Rubrik as a leader in the data management and security space.
RBRK Q3 Guidance Positive
For third-quarter fiscal 2025, RBRK expects revenues to be between $216.5 million and $218.5 million. Non-GAAP earnings are expected to range from a loss of 40 cents to 46 cents per share.
The Zacks Consensus Estimate for third-quarter fiscal 2025 revenues is currently pegged at $217.64 million. The consensus mark for earnings is currently pegged at a loss of 40 cents per share, implying a decline of 1.4% in the past 30 days.
What Investors Should Do With RBRK Stock?
Despite Rubrik’s strong demand for its data security solutions and growing client base, intense competition in the cyber resilience market and macroeconomic challenges are expected to impact RBRK’s top-line growth in fiscal 2025.
IBM’s partnership with Palo Alto Networks further highlights Rubrik’s competitive pressures in the market. By leveraging AI-powered security solutions, IBM aims to enhance its cybersecurity services, improving data security and identity management.
The stock is not so cheap, as the Value Score of F suggests a stretched valuation at this moment.
Rubrik currently carries Zacks Rank #4 (Sell), which implies that investors should stay away from investing in this stock at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.