Rubrik (NYSE:RBRK): this analyst just raised his price target

Roth Capital Partners analyst Taz Koujalgi says Rubrik’s (Rubrik Stock Quote, Chart, News, Analysts, Financials NYSE:RBRK) latest quarter showed stronger momentum, with revenue, ARR and free cash flow ahead of expectations.

Koujalgi reiterated his “Buy” rating on Rubrik and raised his target to US$120.00 from US$107.00

“This is still below ‘mature’ levels and below the peer average of about 25%. Hence, we use an EV/S multiple to value the stock,” Koujalgi said in an Aug. 28 update.

Rubrik reported fiscal Q2 2027 revenue of US$427.3-million, up 38% year-over-year and ahead of consensus at about US$396-million. Subscription revenue rose 37% to US$407.2-million, also ahead of Street expectations.

Annual recurring revenue was US$1.66-billion, up 32.6% year-over-year and ahead of consensus at US$1.64-billion. Net new ARR was US$96-million, up about 35%.

Cloud ARR rose 39% to US$1.48-billion, representing about 89% of total ARR. Koujalgi said reported cloud net new ARR was affected by slower migration from non-cloud and term licences, but adjusted cloud net new ARR grew about 19%.

Operating margin was about 8%, better than consensus for negative 2%, while free cash flow was US$66-million, ahead of consensus at US$40-million.

Rubrik guided fiscal Q3 revenue to US$429-million to US$431-million, above consensus at US$418-million. It also raised its fiscal 2027 ARR guidance to US$1.88-billion to US$1.89-billion.

Koujalgi said the company’s Strata.io acquisition contributed minimal revenue and no ARR in the quarter, while guidance does not include any ARR contribution from the deal.

The analyst said momentum improved from the previous quarter, with stronger net new ARR growth and better seasonality than the past two years.

Koujalgi’s US$120.00 target is based on about 12 times fiscal 2027 EV/sales, in line with peers on an EV/sales-to-growth basis.

Risks include a breach or outage that could hurt customer confidence, tougher competition after the Cohesity-Veritas merger and weaker macro or demand trends.

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