Goldman Sachs Keeps Buy Rating on Rubrik (RBRK), Sees Value After Pullback

Rubrik, Inc. (NYSE:RBRK) is one of the AI Stocks on Market Radar. On December 19, Goldman Sachs reiterated its “Buy” rating on the stock with a $120 price target. Firm analysts see a compelling entry point for the stock driven by robust ARR growth and an improving FCF profile.

Discussing the recent pullback, the firm noted how pressure on the shares aligns with Lightspeed’s in-kind distribution of over 3 million shares, alongside a broader selloff in high growth security software.

“We reiterate our Buy rating and $120 Price Target on Rubrik following a ~17% pullback in the stock vs. post-F3Q earnings highs.”

The firm noted that Lightspeed entities still hold an estimated 9-10 million shares, which is less than 7% of the current public float and equivalent to roughly three days of average daily trading volume.

The stock has traded down to slightly above pre-F3Q levels even though Rubrik delivered a robust beat-and-raise quarter. This suggests the market is currently undervaluing Rubrik’s despite strong fundamentals, creating an attractive entry point.

“In our view, the market is currently discounting the company’s best-in-class mid-30s ARR growth trajectory and inflecting FCF profile, trading at ~11x EV/S (NTM) vs. high-growth security and platform peers at 13x despite comparable or lower ARR/FCF growth. We view this disconnect — where a stock with a strong fundamental print is available at a near pre-earnings price — as a compelling entry point.”

​Rubrik Inc. (NYSE:RBRK) provides data security solutions to individuals and businesses worldwide.

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Disclosure: None.