• If you are wondering whether Rubrik’s current share price lines up with its business potential, you are not alone. This article will walk through how the market might be valuing the stock today.
• Rubrik shares last closed at US$71.67, after a 6.3% decline over the past 7 days and a 21.5% decline over the past 30 days, while the 1 year return sits at 13.4%.
• Recent coverage around Rubrik has focused on its position as a data security and backup software provider and its status as a listed name on the NYSE. This has kept investor attention on how the market is pricing its growth potential. These themes help frame the recent share price moves and why sentiment around the stock can shift quickly.
• Rubrik currently scores 2 out of 6 on our valuation checks. Next we will look at what traditional methods like multiples and discounted cash flows say about that score, before finishing with a different way of thinking about valuation that many investors overlook.

Rubrik scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Rubrik Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business might be worth today by projecting its future cash flows and then discounting those cash flows back to the present using a required rate of return.

For Rubrik, the model used is a 2 Stage Free Cash Flow to Equity approach. The company’s latest twelve month free cash flow is reported at about US$237.2 million. Analyst and extrapolated projections used by Simply Wall St extend out ten years, with projected free cash flow of US$1.5b in 2035. All projections are in US$, even though reporting and listing currencies can differ.

When those projected cash flows are discounted back to today, the model arrives at an estimated intrinsic value of about US$86.26 per share. Compared with the recent share price of US$71.67, this indicates an implied discount of 16.9%. This suggests the shares are currently priced below this DCF estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Rubrik is undervalued by 16.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks based on cash flows.

Approach 2: Rubrik Price vs Sales

For a business like Rubrik, where investors often focus on revenue rather than current earnings, the P/S ratio is a common way to think about what you are paying for each dollar of sales.

In simple terms, higher expected growth and lower perceived risk can justify a higher P/S multiple. In contrast, slower expected growth or higher uncertainty usually point to a lower, more conservative P/S level.

Rubrik currently trades on a P/S of 11.99x. That sits above the Software industry average of 4.90x and also above the peer group average of 8.92x. To add more context, Simply Wall St calculates a proprietary “Fair Ratio” of 10.41x for Rubrik, which is the P/S multiple suggested by factors such as its earnings growth profile, profit margins, size, industry and specific risks.

This Fair Ratio can be more useful than a simple comparison with industry or peers because it adjusts for Rubrik’s own characteristics rather than assuming all companies should trade on the same benchmark.

Comparing the Fair Ratio of 10.41x with the current P/S of 11.99x points to Rubrik trading above this modelled level, which indicates the shares appear overvalued on this metric.

Result: OVERVALUED

P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Rubrik Narrative

Earlier we mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St let you attach your own story about Rubrik to the numbers by linking a view on its revenue, earnings and margins to a forecast and fair value. This updates automatically as new news or earnings arrive and makes it easier to compare that Fair Value with today’s price. This is why two investors on the Community page can both look at the same information, yet one might build a Narrative closer to the higher fair value of about US$125 while another anchors nearer the lower end around US$97, each reaching different decisions without needing to agree with the analyst consensus.

Do you think there's more to the story for Rubrik? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.