Rubric Company New York Stock Exchange: RBRC It is gaining traction through its business and stock price. The stock price rose more than 100% in the fourth quarter, and is on track to double again over the next year. The company is establishing itself as a leading cybersecurity company focused on data, backup and recovery for commercial and government applications. Latest news includes FedRAMP approval and service expansion to drive sequential and sustained year-over-year growth for several quarters. Commercial clients include the huge PepsiCo Nasdaq:BibAllstat New York Stock Exchange: AllHome Depot New York Stock Exchange: HDand a technology pioneer in the field of advanced micro-devices Nasdaq: AMD.
Rubric enters billion-dollar government cybersecurity market
Rubric today
(As of 12/31/2024 at 05:45 PM ET)
- 52 week range
- $28.34
▼
$75.79
- Price target
- $64.11
FedRAMP approval obtained by Rubrik, Inc. It is noteworthy for two reasons. The first is obvious: approval opens the door to the government market and the long-term contracts that come with it. The second is that the approval came based on the recommendation of the National Nuclear Security Administration, which carries some weight.
The takeaway is that the company will likely benefit from this FedRAMP approval. Cybersecurity threats are increasing exponentially and accelerating in 2024, increasing scope and cost, and the demand for cybersecurity by government agencies is increasing. Government spending on cybersecurity in the United States is expected to reach $27.5 billion in 2025, nearly double the 2024 estimate and at record high levels that are expected to continue. NNSA approval makes Rubrik an excellent choice.
The company’s business results since the IPO have been good. The first three quarters saw sequential revenue growth accelerate from 9.6% in Q2 to more than 15% in Q3. The results also included better-than-expected guidance indicating that the strength will continue. The company forecast $232.5 million at the middle of the revenue range and may be cautious in its estimate. The forecast assumes a sequential contraction that goes against the trend.
Growth catalysts in calendar 2025 include the rollout of new API tools. The tools will allow users to connect their data to critical cloud infrastructure in Microsoft Azure and Amazon AWS with the Rubrik app. The bottom line is that Rubrik enters the world of AI and can facilitate the secure development of AI and AI applications.
Analyst sentiment drives price action in Rubrik shares
Analyst sentiment trends are bullish for this stock, including increasing coverage, high consensus target, and high condemnation. The number of analysts covering it reached 20 in December, up by two over the month, with 18, or 90%, rating it a Buy. The price target lags behind the stock’s price in late December but is up 50% in calendar Q4, with the revisions providing a big boost to the market. The upper range of targets suggests a possible move to $83, another 18% upside from the crucial resistance target, and potentially even higher targets in 2025.
Institutional activity is also lifting this market. Institutions have been buying this stock in large quantities since the IPO and have acquired more than 50% of it, with activity increasing in the fourth quarter. Holders of these funds include ETFs, mutual funds, public and private venture capital and provide a stable support base. Their activity corresponds to the market bottom and subsequent rise to new highs.
Rubric’s artistic outlook is strong. The 2024 uptrend is characterized by high volume and upward momentum, which will likely send stock prices higher. Critical resistance is near $75 and is likely to be tested in early January. A move to higher levels is a bullish signal. This stock could advance another $35 to $110 in this scenario, a move equal in size to the rally that preceded it.
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