Mitchell Martan
Investment Researcher for The Long Investor, Economics/Finance Background
Rubrik crushed earnings, as strength in cybersecurity and good management delivered well above expectations even though the stock is not cheap. Revenue was $427 million versus $387 million expected, up 38%, and EPS of $0.20 beat the $0.04 expected. CEO Bipul Sinha's pre-earnings post that cyber resilience is the only real cybersecurity strategy in the post-Mythos era signaled confidence. x.com x.com x.comÂ
Rubrik crushed its quarter across the board. Per Wall St Engine, adjusted EPS was $0.16 versus a -$0.53 estimate, subscription revenue rose 41% to $374.2 million and subscription ARR rose 32% to $1.57 billion. Full-year revenue guidance of $1.638-1.648 billion and Q2 revenue guidance of $395-397 million both topped estimates. x.comÂ
Rubrik's high switching costs and emerging AI-security demand underpin growth that looks attractively valued. At 12.9x forward EV/sales, it trades below the cybersecurity peer median relative to expected revenue growth. Subscription ARR grew 32.6% YoY and net dollar retention reached 119%. Agentic AI security adoption remains early; non-GAAP operating margin hit 7.8%, though GAAP net income remains negative partly due to stock-based compensation. x.comÂ
Rubrik's earnings show the stock will do exceptionally well over the long run, even though, as expected, it sold off 8% after hours despite the beat. x.com x.comÂ
Rubrik is too expensive now against a $70-80 valuation, even though its very strong platform drives nearly 40% growth that can continue for many years as a cybersecurity and data-recovery play. x.comÂ
Rubrik is a top-tier company in a top-tier sector, one of the first to tackle agentic AI security, and well on its way to becoming a $50B cybersecurity leader this decade. Q2 revenue rose 38% to $427.3M versus $396.3M expected, subscription ARR grew 33% to $1.66B and cloud ARR 39%, with a 15% free-cash-flow margin. Cybersecurity's TAM keeps expanding, with giants like Palo Alto Networks, Cloudflare and CrowdStrike still growing double digits. x.comÂ
Rubrik has become part of the cybersecurity infrastructure layer in the agentic AI era, agnostic to models, chips and clouds. Strong CrowdStrike and Okta reports should mean a substantial beat and raise, and maybe a rerating. If that doesn't come, it would raise questions, as security starts sorting into winners and not-winners. x.com x.comÂ
Rubrik is in a dangerous place, one deceleration away from growth in the 20s while still sub-scale. Palantir is a better company at a much better multiple and is accelerating while sustaining triple-digit growth. Rubrik would be worth a solid bet in the $60s or $70s, but on current fundamentals it shouldn't be more than a 5% position. x.comÂ
Rubrik's results look stellar and the stock could resolve higher once they are digested. It roughly doubled the analyst EPS estimate for FY27. x.comÂ
Rubrik should not be compared with SentinelOne because Rubrik generates real free cash flow. SentinelOne began decelerating before reaching $1 billion of revenue, while Rubrik is likely to exceed $2 billion and still grow at around 20% a year. Concerns about subscription billings timing miss the point; the past three years of cash generation show the trend. x.com x.comÂ
Rubrik, Zscaler and Microsoft look very bearish: their reliance on cheap H-1B labor leaves their P&Ls exposed, and those P&Ls are expected to worsen. x.comÂ
Rubrik is a decent way to own cybersecurity at about 9x next-twelve-month revenue, while CrowdStrike, Cloudflare and Palo Alto Networks valuations look ridiculous. It still needs to improve margins and reduce dilution. x.comÂ
