Rapid7 (NASDAQ:RPD) & HubSpot (HUBS) Financial Analysis

HubSpot (NYSE:HUBS) and Rapid7 (NASDAQ:RPD) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, profitability, dividends and earnings.

Earnings and Valuation

This table compares HubSpot and Rapid7’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HubSpot $375.61 million 13.98 -$39.71 million ($1.02) -132.69
Rapid7 $200.94 million 8.10 -$45.47 million ($1.05) -33.07

HubSpot has higher revenue and earnings than Rapid7. HubSpot is trading at a lower price-to-earnings ratio than Rapid7, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

96.4% of HubSpot shares are held by institutional investors. Comparatively, 78.7% of Rapid7 shares are held by institutional investors. 9.6% of HubSpot shares are held by insiders. Comparatively, 25.6% of Rapid7 shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Profitability

This table compares HubSpot and Rapid7’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HubSpot -13.43% -19.34% -5.74%
Rapid7 -23.83% -89.66% -16.19%

Risk & Volatility

HubSpot has a beta of 1.92, suggesting that its share price is 92% more volatile than the S&P 500. Comparatively, Rapid7 has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and recommmendations for HubSpot and Rapid7, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HubSpot 0 4 11 0 2.73
Rapid7 0 3 10 0 2.77

HubSpot presently has a consensus target price of $147.29, suggesting a potential upside of 8.83%. Rapid7 has a consensus target price of $35.46, suggesting a potential upside of 2.14%. Given HubSpot’s higher probable upside, equities analysts plainly believe HubSpot is more favorable than Rapid7.

Summary

HubSpot beats Rapid7 on 11 of the 14 factors compared between the two stocks.

About HubSpot

HubSpot, Inc. provides a cloud-based marketing and sales software platform for businesses in the Americas, Europe, and the Asia Pacific. Its software platform includes integrated applications, such as social media, search engine optimization, blogging, Website content management, marketing automation, email, sales productivity, CRM, analytics, and reporting. The company also offers professional, and phone and email-based support services. It serves mid-market business-to-business, and B2B companies. The company markets its product through inbound go-to-market approach, marketing agency, and sales partners. HubSpot, Inc. was founded in 2005 and is headquartered in Cambridge, Massachusetts.

About Rapid7

Rapid7, Inc. provides analytics solutions for security and information (IT) operations. Its vulnerability management solutions include InsightVM and Nexpose, which enables customers to assess and remediate their overall exposure to cyber risk; InsightAppSec, an insight platform based solution; AppSpider, an application security testing solution; and Metasploit, a penetration testing software solution. The company's incident detection and response solutions comprise InsightIDR, an insight platform based solution; Managed Detection and Response, an outsourced service; and incident response services that offer customers with access to security experts and experience. In addition, it provides Logentries, a cloud-based solution for collecting, searching, visualizing, and analyzing log data, as well as enables organizations to store and search data; InsightOps, an IT operations solution to centralize machine data from organizations' IT environments for operational awareness and control; and Komand, a solution, which is designed to automatically identify risks, respond to incidents, and address issues. Further, the company provides security advisory services, such as cyber security maturity assessment, incident response program development, penetration testing, security program development, Virtual CISO, IoT security, and threat modeling services. It offers its products through a combination of perpetual and term software licenses, cloud-based subscriptions, and managed services. The company serves clients in technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. Rapid7, Inc. was incorporated in 2000 and is headquartered in Boston, Massachusetts.

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