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Goldman Sachs analyst Kash Rangan reiterated a Buy rating on Rubrik, Inc. (NYSE:RBRK) with a price target of $48.
Yesterday, Rubrik reported a quarterly EPS loss of $1.58 versus a year-ago loss of $1.48 and sales of $187.31 million, up from $135.74 million in the year-ago period.
Rubrik said it sees a second-quarter EPS loss of $0.50-$0.48 vs. market estimates of $0.50 loss and revenue of $195 million to $197 million versus estimates of $194.89 million.
The analyst says that despite the recent softening sentiment in the software sector due to several weaker-than-expected off-cycle prints, they maintain a positive outlook on the quality of Rubrik’s results.
The analyst writes that Subscription ARR outperformance beats their expectations by 4%, and Contribution Margin outperformance exceeds expectations by 500 basis points, and there is a 21-point beat on Free Cash Flow Margin compared to consensus.
However, management indicated strong linearity in the first quarter, with relatively stable macro conditions and a healthy pipeline. Given the recent negative data points from the software sector, exercising caution seems prudent at this early stage in the year, writes the analyst.
Despite potential challenges, Rangan expects Rubrik to outperform its improved ARR guidance thanks to its position as a next-gen data security platform, accelerating large deal activity, and sustainable Net Revenue Retention over 120%.
The analyst says the company is positioned for long-term ARR growth of over 20% and achieving over 20% operating margins as its base matures.
The analyst revised EPS loss estimates to $2.30 from $1.61 for FY25, $1.50 from $1.19 for FY26 and $0.82 from $0.64 for FY27.
Price Action: RBRK shares are down 6.11% at $33.11 at the last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Posted In: RBRK
