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Rubrik (RBRK) is a company that offers live data access for recovery and application development by integrating enterprise data management with web-scale information technology and eliminating backup software. Basically, Rubrik aims to end a decade-long innovation drought in backup and recovery, as businesses can easily manage huge data sets across private and public clouds.

Rubrik went public via an initial public offering (IPO) last month, as it priced its IPO at $32 a share. It sold 23.5 million shares and raised $752 million via the IPO, valuing the company at a market cap of $5.6 billion.

Microsoft (MSFT) invested in Rubrik three years ago at a $4 billion valuation, and venture capital firm Lightspeed has more than 25% of the company's voting power. Today, Rubrik is valued at $6.2 billion by market cap, given the stock is priced at $35.38 per share. Let’s see if it makes sense to invest in Rubrik stock right now.

Is Rubrik Stock a Good Buy Right Now?

Rubrik is a data management company that is backed by Microsoft. Initially, Rubrik began as an on-premise backup and recovery company where it sold perpetual licenses to enterprises and set up hardware maintenance contracts to ensure data storage processes, such as backup and compression, function smoothly.

In recent years, Rubrik transitioned to a SaaS (software-as-a-service) model for cloud-based cybersecurity software. Now, businesses can use the software platform to secure data across cloud applications and prevent data loss in cases of ransomware attacks.

The massive rise in cyberattacks and data breaches in the last few years has driven increased demand for data management solutions globally. Moreover, Rubrik’s zero-trust architecture provides it with a competitive advantage, resulting in strong customer acquisition and retention rates.

Rubrik has a significant scale, and ended fiscal 2024 with an annual recurring revenue of $784 million, up 47% year over year. In early 2023, Rubrik stated it surpassed $500 million in ARR with a net dollar retention rate of over 140%. That suggests existing customers increased spending by 40% in the last 12 months.

The company ended fiscal 2024 with 6,100 customers, and subscription sales account for 91% of revenue, up from 59% two years back. Further, roughly 100 customers contribute over $1 million in subscription ARR.

Similar to many other growth stocks, Rubrik is still unprofitable. The company reported a net loss of $354 million in fiscal 2024, which was higher than its prior-year loss of $278 million.

Analysts Are Bullish on Rubrik Stock

Following the expiration of its post-IPO quiet period, several investment banks have initiated coverage on Rubrik stock. According to Truist Securities, Rubrik’s data security approach should shield customers from cyberattacks. Truist assigned a Buy rating for Rubrik, saying it expects the SaaS company to increase sales by 40% annually through 2026, which should help it improve profit margins significantly. In fact, Truist expects Rubrik’s free cash flow margin to trend around 15% by the end of fiscal 2026.

Other investment banks, including Goldman Sachs (GS), Citi (C), and Mizuho, all initiated coverage on RBRK with “Buy” ratings as well, while Capital One (COF), Wells Fargo (WFC), and KeyBanc (KEY) have “Overweight” ratings.

Out of the 12 analysts covering RBRK stock, 11 recommend “Strong Buy," while one recommends “Hold.”

On the date of publication, Aditya Raghunath 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.