Rubrik’s subscription gains and recent share weakness give a buying opportunity

Investing.com -- Rubrik is expected to deliver stronger subscription revenue growth in the coming quarters while the recent pullback in the stock gives investors a more attractive entry point.

Mizuho upgraded the data security company to Outperform given its steady execution and a widening gap between Rubrik and rivals.

Mizuho said Rubrik continues to benefit from a sharper focus on data protection and the ability to restore systems quickly after ransomware incidents, which it believes has helped the company distance itself from both older and newer competitors.

Analysts said checks point to healthy upside in subscription annual recurring revenue, with growth projected at about 32 percent year on year for the December quarter.

They also forecast total revenue of 321 million dollars, up 36 percent, and expect further strength from partners focused on cyber resiliency.

The firm added that new tools for managing AI driven actions and identity recovery add optionality without being reflected in the current valuation.

Shares are down about 16 percent since May despite solid results, and Mizuho said it sees the stock as oversold. Rubrik trades at valuation multiples below high growth peers even though its expected growth rate is higher, the analysts said.

Mizuho held its price target of 97 dollars, saying the company is set up to grow recurring revenue at a solid pace over the medium term even as margins remain lower.