MeritValue

Rapid7, Inc.

RPDdata completeness 88%13 fiscal years on file
The thesis, from the filings

Rapid7, Inc. earns about 80% on equity, far above its ~9% cost of capital, but has diluted owners by 18% over 5 years — a real edge showing up in the numbers. The estimate methods put fair value between $77.14 and $137.96 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$535.4M1$685.1M2$777.7M3$844M3$859.8M3
Net income−$146.3M4−$124.7M5−$152.8M6$25.5M6$23.4M6
Operating cash flow$53.9M7$78.2M8$104.3M9$171.7M9$153.8M9
Capital expenditure$9.01M10$20.4M11$4.37M12$3.43M12$7.6M12
Free cash flow (derived)$44.9M7$57.8M8$99.9M9$168.2M9$146.2M9
Total debt—————
Cash & equivalents$164.6M13$207.3M14$213.6M15$334.7M15$246.7M15
Diluted shares55.3M58.6M60.8M63.2M65.0M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$23.8
your share of equity
Profit it earned you last year
$3.6
Free cash flow it threw off
$22.5
Debt you’d be carrying
—

10 shares is a claim on $23.8 of net worth that earned you $3.6 and generated $22.5 of cash last year.

iii. Is this a good business?
Moat signal · return on equity
80% avg · 5y
FY21 —FY22 —FY23 —FY24 144%FY25 15%

It earned about 80% on equity, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
+18% shares · 5y

Share count is up 18% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 2 estimate methods that apply put fair value between $77.14 and $137.96 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$137.96
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth20.0%
  • fcfBase$146.2M
DCF · Growth Exit 5Y
$77.14
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth20.0%
  • fcfBase$146.2M
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$4.39
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years20.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $77.14
The three cases
Bear0.0%$35.94
Base20.0%$77.14
Bull20.0%$77.14

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 20.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001560327-24-000021 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001560327-25-000021 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001560327-26-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001560327-24-000021 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001560327-25-000021 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001560327-26-000008 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001560327-24-000021 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001560327-25-000021 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001560327-26-000008 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001560327-24-000021 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0001560327-25-000021 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0001560327-26-000008 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0001560327-24-000021 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0001560327-25-000021 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0001560327-26-000008 (CashAndCashEquivalentsAtCarryingValue)