M&M Lion Fund
Small-Fund Portfolio Manager Since 2023, IE Business School & Javeriana Background
Rubrik's Q2 looked good on the surface, but a more defensive call raised concerns. Billings grew 19% versus 38% revenue and 33% ARR growth, which no analyst asked about, and the company should start disclosing RPO and cRPO. Sales leadership churn and guided deceleration in net-new business also bear watching. An 11x EV to fiscal 2028 sales multiple gives roughly $112 per share; with the stock up more than 150% from this year's lows, trimming some shares may be worth considering. 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 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 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 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 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'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 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 belongs in the too-hard pile until it proves it can make money and stop diluting shareholders. @InvestingVisual notes that net losses, dilution and stock compensation as a share of revenue are shrinking each quarter, but trending in the right direction is not good enough for a large investment; continued proof over time could prompt a rethink. x.com x.comÂ
Rubrik looks more interesting than CrowdStrike here because agentic AI creates an even bigger cybersecurity tailwind for it. Identity and data security could be two of agentic AI's biggest cybersecurity beneficiaries. Rubrik is a young IPO flagging after breaking out of a 14-month base, growing 30%+ at a valuation near CrowdStrike's, and technically resembles Arm when it broke its IPO base around the $170s. x.comÂ
