Rubrik Stock Climbs on Raised Annual Revenue Expectations
On Friday, Rubrik's shares rose dramatically by 22% in pre-market trading in the U.S. This increase came after the data management company surpassed earnings expectations and raised its annual revenue outlook. Analysts attribute the company's strong performance to the rising demand for data security, identifying this demand as a driving force behind impressive results.
Truist Securities, which maintains a 'buy' recommendation on the stock, raised its price target for Rubrik from $50 to $75. The firm recognizes Rubrik's unique market position as the only provider offering both cyber resilience and data security management. Third quarter results benefited from the public cloud, software as a service (SaaS), and data security sectors.
KeyBanc, which maintains an 'equal weight' stance, shares a similar viewpoint regarding momentum in data security driven by an increase in ransomware attacks. Demonstrating confidence in the company's management, the firm raised Rubrik's price target from $57 to $75.
BMO Capital Markets, which has an 'outperform' rating, also described the quarterly results as impressive and significantly increased its price target from $38 to $72. Analysts at BMO predict that broader adoption of GenAI technology could trigger long-term growth and that current demand for Rubrik's platform will remain strong.
In the third quarter, Rubrik reported a adjusted loss of 21 cents per share, significantly better than the expected loss of 40 cents per share. Total revenue reached $236.2 million, surpassing the estimate of $217.6 million. Subscription revenue came in at $221.5 million, compared to the expected $205.2 million. Maintenance revenue was reported at $4.34 million, slightly above the estimate of $4.03 million. The company’s annual recurring revenue (ARR) exceeded the expected $975.3 million, reaching $1.00 billion. The number of customers with $100,000 or more in subscription ARR came in at 2,085, slightly below the predicted 2,092. Lastly, Rubrik achieved $15.6 million in free cash flow.
Looking ahead to 2025, Rubrik raised its revenue guidance from a previous range of $830 million to $838 million to a new range of $860 million to $862 million, while the consensus estimate stands at $834.9 million. The company expects an adjusted loss per share to be between $1.82 and $1.86, an improvement from the previous estimate of between $2.06 and $2.12, corresponding to a predicted loss of $2.09 per share. The subscription ARR is expected to align with previous forecasts, reaching $1.06 billion. The expected adjusted subscription ARR contribution margin is set at between -2% and -3%, better than the previously anticipated range of -6% to -7%. Additionally, Rubrik narrows its free cash flow forecast to a negative range of $39 million to $45 million, compared to a previous estimate of negative $57 million to negative $67 million, with a consensus estimate at negative $61.2 million.