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Rapid7

RPD
42
Software - Infrastructure · Technology
Exchange
NASDAQ
Winston Score
42
Winston is serious
Mixed quality — meaningful strengths and weaknesses.
Data as of Aug 23, 2026 · filings through Jun 30, 2026
How the score breaks down
Quality
Mixed
Growth
Weak
Cash Flow
Exceptional
Stability
Weak
Valuation
Good

Winston Score History

The full picture

Rapid7 is a cybersecurity company that helps businesses find and fix weaknesses in their computer systems before hackers can exploit them. Its main products include InsightVM for spotting vulnerabilities, InsightIDR for detecting threats, and a managed detection and response (MDR) service where Rapid7's own security experts monitor customers' networks around the clock. The company sells primarily to mid-sized and large enterprises across industries like healthcare, finance, and government.

Rapid7 makes most of its money through annual software subscriptions and managed service contracts, which creates recurring revenue. It operates mainly in North America but has customers across Europe and other regions, with annual revenue around $800 million. The cybersecurity market is competitive, with larger rivals like CrowdStrike and Microsoft putting pressure on pricing and customer retention. Rapid7's key challenge is proving it can grow profitably while competing against vendors with much larger resources and broader product portfolios.

Score breakdown

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Quality

Profit per sale
Gross Margin
68.9%
Premium pricing power — 68.9% gross margin
Profit after running costs
Operating Margin
1.4%
Thin — 1.4% operating margin
Return on the money invested
ROCE
1.0%
Weak — 1.0% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales growth
Sales YoY
+0.1%
Nearly flat sales (+0.1% YoY)
Profit growth
EPS YoY
-23.8%
Earnings shrinking (-23.8% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
3/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash
Cash Conversion
759%
Turns 759% of profit into real cash
Spare cash per sale
FCF Margin
16.4%
Converts sales into free cash efficiently (16.4%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

What it owes vs what it owns
Debt / Equity
4.55
Heavy debt load (4.55)
Covers its interest
Interest Cover
1.04x
Dangerous — barely covers interest (1.0x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

Price vs profit
P/E Ratio (TTM)
38.9x
no trend
Pricey — P/E 38.9

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year
P/E vs Forward
+31.4
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (38.9 → 7.5)

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Dividends

Not applicable for this business.
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