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With the ongoing digitization and artificial intelligence (AI) trend, data has become a valuable commodity. Companies that offer cutting-edge data security and cloud management solutions are finding themselves in the spotlight. One such company is Rubrik (RBRK), which specializes in data management and cloud data security. Founded in 2014, it is a relatively new player in the space. Despite being a newcomer, Rubrik has quickly established itself as a force in cloud data management and cybersecurity.
The company achieved unicorn status within a few years of its founding, thanks to a series of funding rounds led by major venture capital firms. The unicorn moniker is given to privately held startups whose valuation exceeds $1 billion. According to Forbes, Rubrik was one of the few companies to achieve this status so quickly, whereas most companies take seven years or more.
In April, Rubrik went public through an initial public offering (IPO) priced at $32 per share. Following its IPO, the company is now valued at $5.7 billion, and the stock is down 17% from its highs - but Wall Street believes RBRK is a “strong buy,” with an upside potential of around 42%. That suggests the current dip may be an excellent opportunity to purchase this cybersecurity software company. Let's find out why.
Rubrik: A Dig Into Its Financials
Rubrik's products use machine learning to provide backup and recovery solutions, protecting data from cyberattacks and operational failures. As more organizations move their operations to the cloud and with cyberattacks on the rise, the demand for robust security and data protection tools like Rubrik's has increased.
Its products are known for simplifying data management, cyber-proofing enterprise data, automating workflows, and providing ransomware protection, all of which are critical features in today's increasingly complex data ecosystem.
Rubrik's total revenue in the second quarter of fiscal 2025 increased 35% year on year to $205 million. Subscription ARR (annual recurring revenue), a metric used to assess customer trust in the company's products, increased by 40% to $919.1 million.
In the previous quarter, Rubrik's CEO, Bipul Sinha, discussed how he believes the company has a massive opportunity in cybersecurity and data security, with a total addressable market of approximately $53 billion by 2027.
The company isn't yet profitable. GAAP net loss per share came in at $0.98, down from $1.35 in the same quarter last year. Management expects revenue of $830 million to $838 million for the full fiscal year, which is consistent with Wall Street's consensus estimates. Subscription ARR could range from $1.026 billion to $1.032 billion.
Furthermore, in fiscal 2026, analysts predict total revenue to increase by 27.5% to $1.06 billion. In 2021, Rubrik entered into a strategic partnership with Microsoft (MSFT), solidifying its position as a major player in the cloud security industry. This collaboration aims to improve data security and resilience throughout Microsoft Azure environments.
This year, the company formed another partnership with cybersecurity firm CrowdStrike (CRWD) to integrate the company's Falcon XDR platform and Rubrik Security Cloud to accelerate data security transformation.
More recently, Rubrik collaborated with Mandiant, which is part of Alphabet's (GOOGL) Google Cloud. This collaboration aims to integrate Mandiant Threat Intelligence with Rubrik Security Cloud to "help organizations before, during, and after cyber-attacks to ensure businesses can respond quickly and get back up and running as soon as possible."
What Do Analysts Say About Rubrik Stock?
Overall, Wall Street maintains a "strong buy" rating on Rubrik stock, with all 16 analysts who cover the stock giving it their highest recommendation. Recently, Robert W. Baird analyst Shrenik Kothari maintained a “buy” rating on the stock and set a price target of $42. Kothari is pleased with the increase in the company's subscription ARR, which indicates more predictable and recurring revenue.
Furthermore, after the strong quarter, analysts at Citi, Barclays, Wells Fargo, Wedbush, and more also reiterated their “buy” ratings for Rubrik stock.
Based on analysts' average price target of $44.75, Wall Street expects a potential upside of about 40.1% in the next 12 months. Plus, the Street-high target estimate of $52 implies the stock could climb by 62.8% from current levels.
The Bottom Line on Rubrik Stock
Rubrik has strong financial backing, strategic partnerships, and a product suite that addresses some of the most pressing data protection issues. Rubrik is undoubtedly a company that will continue to be on the radar of tech investors for many years to come. That said, as a growing company in a highly competitive market, it might take a while before Rubrik turns a profit. This hypergrowth AI tech stock is best suited for investors with a healthy appetite for risk and a longer investment horizon.
On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
