Rapid7, Inc. (RPD): A Bull Case Theory 

We came across a bullish thesis on Rapid7, Inc. on Show me the incentives…’s Substack. In this article, we will summarize the bulls’ thesis on RPD. Rapid7, Inc.’s share was trading at $20.81 as of September 22nd. RPD’s trailing and forward P/E were 47.30 and 9.95 respectively according to Yahoo Finance.

Rapid7, Inc. (RPD), a Boston-based cybersecurity company public since 2015, is undergoing a strategic pivot from a suite of standalone solutions toward an integrated Command Platform launched in August 2024. This unified offering combines vulnerability, cloud, and endpoint management with AI-driven detection and response, addressing customer demand for streamlined visibility and security outcomes. Financially, the shift has borne fruit: revenue grew from $411.5 million in 2020 to $844 million in 2024, a 20% CAGR, while profitability improved with $25.5 million net income in 2024 versus steep losses in prior years.

Despite historical share dilution and ~$900 million in convertibles due in 2027 and 2029, Rapid7 maintains $600 million in cash and investments, generating interest income exceeding debt costs. Current guidance projects $858 million revenue, $163 million EBITDA, and $125–135 million free cash flow, equating to an attractive ~10% FCF yield and ~9.8x EV/EBITDA valuation.The company has become a focal point for activist investor JANA Partners, which now controls over 14% of shares and board representation following its March 2025 cooperation agreement. JANA has pressed for governance changes, operational improvements, and potential strategic alternatives, including a sale.

Cannae Holdings, led by Bill Foley, also maintains a position and has the resources to participate in a potential acquisition, while UBS appears to have played a role in swap exposures linked to JANA. Takeover speculation has circulated since 2023, with prior interest from TPG, Alphabet, and Thoma Bravo, and insiders, including long-time CEO Corey Thomas, are financially incentivized to pursue a transaction. Elevated professional fees suggest corporate advisory activity behind the scenes. With a cleaner operating profile, cash-backed balance sheet, activist pressure, and aligned insiders, Rapid7 stands as a credible acquisition candidate, offering investors asymmetric upside.

Previously we covered a bullish thesis on Qualys, Inc. (QLYS) by Na’s Substack in May 2025, which highlighted strong profitability, high free cash flow margins, and disciplined capital returns despite slowing growth in its core vulnerability management business. The company’s stock has appreciated approximately 7.54% since our coverage, and the thesis still stands given its resilient cash generation. Show me the incentives… shares a similar view through Rapid7, Inc., but emphasizes its pivot, activist involvement, and sale potential.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW

Disclosure: None.