BTIG Calls Rubrik “Underappreciated AI-Driven Growth Story” — So Why Is RBRK Stock Falling?

Cybersecurity company Rubrik’s RBRK -1.51% ▼ shares continue to fall on Friday afternoon. This is despite a bullish call from financial services firm BTIG, which praised the California-based company as an “underappreciated AI-driven growth story.”

Claim 70% Off TipRanks Premium

• Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions

• Stay ahead of the market with the latest news and analysis and maximize your portfolio’s potential

Rubrik focuses on providing data security solutions, including data protection and data threat analytics, to businesses and individual customers alike. It serves a wide range of industries, from finance, retail, and transportation to energy, industrial, and healthcare.

However, since the start of the year, Rubrik’s shares have declined about 35%. Jitters that autonomous artificial intelligence could render traditional software companies obsolete further pressured the stock.

‘Most Aggressive Vendor’

Yet, BTIG analyst Gray Powell has expressed confidence in Rubrik and called the stock a Buy. The four-star-rated analyst kicked off coverage of RBRK by assigning a price target of $64, which implies about 27% upside.

Powell sees several “durable tailwinds” fueling Rubrik’s revenue growth over the next few years, including the sharp rise in ransomware and wiper attacks in recent years. He sees this type of incident continuing to surge as attackers leverage AI to scale, thereby making data backup and protection even more crucial for security systems.

In addition, Powell said his checks with industry insiders showed that Rubrik is commonly seen as “the most aggressive and innovative vendor” in the industry.

Is AI a Threat to Rubrik?

Meanwhile, the BTIG analyst also pointed out that he sees AI “not [as] a headwind,” but as providing positive momentum to power Rubrik’s growth over the long term. Powell noted that Rubrik could grow its annual recurring revenue by about 29% compared to Wall Street’s expectation of 25.5%.

He added that his team sees Rubrik’s Identity Security and Agent Cloud products in a favorable light. The analyst’s comment comes even as Rubrik this week launched a data protection service for users of Alphabet’s GOOGL -1.92% ▼ Google Workspace.

Is Rubrik a Good Stock to Buy?

Across Wall Street, analysts are highly bullish on Rubrik’s shares and currently have a Strong Buy consensus rating on the stock based on 22 Buys assigned over the past three months.

In addition, the average RBRK price target of $87.14 implies about 74% upside.

Disclaimer & DisclosureReport an Issue