Rubrik’s new Google Workspace protection and MSP tools

Rubrik (RBRK) has rolled out Rubrik Data Protection for Google Workspace, alongside fresh Security Cloud features aimed at managed service providers, plus a new cyber recovery cloud partnership with Rackspace focused on UK sovereign workloads.

Despite a steady flow of product launches, partnerships and fresh guidance updates in recent weeks, Rubrik’s share price performance has been weak, with a 7 day share price return of 9.44% and a year to date share price return of 30.98% decline, while the 1 year total shareholder return sits at 26.59% decline. This suggests momentum has been fading even as the business focuses on cyber resilience and cloud data protection.

If this kind of security and infrastructure story interests you, it may be worth scanning other names riding similar themes through our screener of 34 AI infrastructure stocks

With Rubrik stock down 31% year to date despite new products, partnerships and revenue growth guidance, is the recent weakness a mispricing in a fast growing data security name, or is the market already factoring in that future growth?

Most Popular Narrative: 48.2% Undervalued

Rubrik’s most followed narrative pegs fair value at $100.52 versus the last close at $52.09, framing a wide gap that all hangs on future execution and cash flows.

The analysts have a consensus price target of $112.684 for Rubrik based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $125.0, and the most bearish reporting a price target of just $97.0.

Curious what kind of revenue trajectory, margin lift and valuation multiple need to line up for that $100.52 fair value to make sense? The most followed narrative stitches together ambitious top line assumptions with a sharp swing in profitability and a premium earnings multiple that is far from ordinary.

Result: Fair Value of $100.52 (UNDERVALUED)

However, you still need to weigh up real risks, including intense cyber resilience competition and any slowdown in AI or cloud adoption that could undermine these assumptions.

Another View: Valuation Looks Rich On Sales

The SWS DCF model suggests Rubrik is worth $70.88 a share, compared with the current $52.09 price, which points to undervaluation. Yet on sales, the stock trades on a P/S of 7.9x versus 3.5x for the US Software industry and a fair ratio of 7.4x, which implies less room for error if growth or margins disappoint.

Next Steps

With mixed signals on valuation and sentiment, it makes sense to check the numbers and sentiment for yourself and move quickly if you form conviction. You can start with the 2 key rewards and 2 important warning signs.

Looking for more investment ideas?

If Rubrik has your attention, do not stop here. Broaden your watchlist with a few focused stock ideas that could sharpen how you think about opportunity and risk across your portfolio.

• Target potential mispricings by scanning companies that combine quality fundamentals with attractive valuations through our 49 high quality undervalued stocks.
• Strengthen your income stream by reviewing businesses offering higher yields and resilient payouts using the 15 dividend fortresses.
• Prioritise resilience by checking companies with lower risk profiles and steadier fundamentals through the 73 resilient stocks with low risk scores.

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.