Rubrik Inc (RBRK, Financial) saw a significant uptick in its stock price, climbing 20.44% and reaching a value of $64.63. This surge can be attributed to the company's impressive fiscal third-quarter financial results for 2025, which exceeded market expectations and set a new all-time high for the company.
Rubrik's Q3 revenue exhibited robust growth, increasing by 43% year over year to $236 million. This exceptional growth outpaced the 35% growth recorded in the previous quarter. The cybersecurity firm, known for its expertise in securing enterprise data, primarily generates revenue from subscriptions. The company's annual recurring revenue (ARR) has surpassed the $1 billion mark in Q3, leading Rubrik to raise its full-year guidance. The company now projects ARR to be between $1,057 million and $1,061 million, up from the previous estimate of $1,026 million to $1,032 million.
Despite the positive revenue growth, Rubrik (RBRK, Financial) faces several financial challenges. The company closed fiscal 2024 with $784 million in subscription ARR but reported a negative free cash flow of nearly $25 million. The company anticipates further negative free cash flow between $39 million and $45 million; however, it remains financially stable with over $600 million in cash and investments.
Analyzing the stock's valuation, Rubrik (RBRK, Financial) currently trades near its all-time high, with a price-to-sales (PS) ratio of 12.34, close to the 1-year high of 14.74. The company's EV/Revenue stands at 12.87, which also approaches its 1-year high. The financial data indicates distress, with an Altman Z-score of -0.75, suggesting a potential bankruptcy risk in the next two years. Additionally, its Sloan Ratio reflects poor earnings quality, with a significant reliance on accruals. Despite these challenges, the Beneish M-Score of Rubrik suggests it is unlikely to be involved in earnings manipulation.
Moreover, analyst Andrew Nowinski from Wells Fargo has significantly revised his price target for Rubrik's stock, moving it from $40 to $76 per share, citing strong growth prospects and operating leverage as primary factors for this adjustment. However, investors should exercise caution as Rubrik continues to issue new debt, reporting an addition of $267.988 million in the past three years, which may impact its future financial health and valuation.
Regarding the company's overall growth prospects, Rubrik is classified as a speculative growth stock, as evidenced by its style score of 245.32. The stock remains a high-risk, high-reward investment opportunity, with a growth grade of 'B' but a financial health grade of 'D'.
While Rubrik’s revenue growth is promising, investors may want to monitor the stock's financial stability and GF Value to ensure informed investment decisions. Unfortunately, the current analysis does not provide a definitive GF Value rating. For more details on GF Value evaluation, investors can visit the GF Value page.
