Rubrik’s stock extended its strong rally on October 23, reaching a record high as demand for cybersecurity solutions continues to grow amid the ongoing AI boom. Shares of RBRK jumped to $129.60, a 210% gain from their lowest point this year, lifting the company’s market capitalization to $26.9 billion. However, the stock appears to be forming a rising wedge pattern, which suggests it could pull back soon.
Rubrik stock jumps as demand for services rise
RBRK stock has been one of the best-performing stocks as the ongoing AI boom has led to a surge in demand for cybersecurity products. This demand has grown in the era of AI agents, which are expected to be the biggest threats in the world.
The most recent results showed that its business continued to boom in the second quarter, with revenue rising by 38% to $427.3 million. Its subscription revenue rose by 37% to $407 million, a trend that the management expects will continue.
Its customers paying at least $100,000 a year rose to 3,084, a 23% annual increase. Some of the biggest customers are companies like PepsiCo, Iron Mountain, and Adobe.
Analysts believe that the company has more room for growth. The average estimate among analysts is that its third-quarter revenue will be $430 million, up by 22% from a year earlier. Its guidance for the fourth quarter is expected to be $446 million, up by 18% from the same period last year.
Analysts are generally bullish on RBRK stock
Top analysts tracking Rubrik have a bullish outlook for the company. Dan Ives, who started Yorkville Ives, initiated the company with a target of $145, suggesting a 12% jump from the current level.
Shrenik Kothari, a Baird analyst, boosted his rating to outperform, while Wedbush’s Steven Wahrhaftig has a target of $120.
The challenge, however, is that the stock has jumped above most of the analysts’ target. The average target among analysts is $115, suggesting a 12% drop from the current level.
A major risk that Rubrik faces is its high valuation multiple. It has a forward price-to-earnings ratio of 240, much higher than the technology sector median of 21. Its forward EV-to-EBITDA stands at 227, also higher than the median of 13.
Rubrik stock technical analysis
RBRK stock chart | Source: TradingView
On the charts, we see that the RBRK stock has been in a strong upward trend in the past few months. It has jumped from a low of $41.73 in January to the current $130. The stock jumped above the key resistance level of $92.26, its highest point in December last year.
It has remained above the 50-day Exponential Moving Average (EMA), which has provided it with a strong dynamic support. The stock also remains above the Supertrend indicator.
These technicals suggest that the stock has more upside to go. Such a move may push it to the resistance level of $150. The risk, however, is that the stock has formed a rising wedge pattern, which is made up of two ascending and converging trendlines.
Rubrik’s MACD indicator has also formed a bearish crossover pattern. Therefore, there is a possibility that the stock will rise a bit, and then retreat as investors start booking profits.
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