Rubrik Stock’s V-Bottom Reversal Signals a Major Rally Ahead
Rubrik, Inc. (NYSE: RBRK) share price corrected sharply in February but hit bottom in March, and the FQ4 earnings result and 2025 outlook secured a V-bottom reversal. Up more than 15% in premarket trading after the report, the market shows strong support and a high likelihood of continuing higher in 2025. The low-ball target is another 25% gain from the critical support target to align with the current all-time high, and several factors suggest that much higher prices are coming.
Analysts and Institutions Provide Strong Support for Rubrik’s Stock Price
The initial analysts’ response is bullish. Tech sector analysts from Rosenblatt Securities to Wedbush are lifting their price targets for this cybersecurity stock, indicating a move above the consensus reported by MarketBeat, which forecasts a 20% upside from the pre-release price action. That target aligns with the post-release price pop, assuming fair value for the market, but the fresh targets add another 30% upside to the forecast, sufficient to set a new all-time high.
Takeaways from the analysts' notes are that this company has a moat. It leans into R&D, focuses on data, and has best-in-class ransomware protection to differentiate it from its competitors and be well-positioned to lead the sector. The analysts' tailwind is strong because of the revision trend but more substantial because of the firm Buy rating and 20% increase in analyst coverage since early 2024. They see this company growing at a solid double-digit CAGR through 2033, reaching profitability in 2028, and then growing earnings at a hyper pace.
Rubrik’s insiders are selling in Q1 2025 but don’t pose a threat to investors. Their small sales align with those of other companies that utilize share-based compensation and represent a fraction of a drop in a bucket relative to the total shares. Further, their selling is offset by robust institutional buying. Institutional investors have bought this stock on balance since the IPO, ramped their activity sequentially through Q1, and netted nearly $1 billion in shares quarter-to-date mid-March, bringing their holding to almost 50%. The tailwind they provide is strong because of the balance of activity, rapidly increasing ownership ratio, and broad-based support within the group.
Rubrik’s Impressive Results Drive Market Sentiment in Spring 2025
Rubrik’s impressive results and guidance explain why market sentiment is improving, and the stock price has surged. The company reported $258.1 million in Q4 revenue and adjusted losses of $0.18, outpacing the consensus reported by MarketBeat by 1000 basis points on the top line and 4600 bps on the bottom. Revenue strength was driven by a 54% increase in subscription revenue and a 39% increase in ARR. ARR is driven by clients of all sizes, with a notable 29% growth in the largest.
Margin news is critical. The company improved its gross and operating leverage and significantly increased free cash flow, up nearly 1000% year over year. This is the first full year of positive free cash flow; guidance includes free cash flow in 2025. The company’s guidance is also impressive, with Q1 and full-year revenue and profitability targets above the consensus reported before the release.
Rubrik Rebounds: Confirms Support at a Critical Level
Rubrik’s post-release price surge confirms support at a critical level and indicates a complete reversal in the price action. The market may retreat from the post-release highs to regroup and retest for support, but higher prices will likely follow quickly. The critical support target is near $63.50, aligning with the top of the price gap, which opened in December 2024. If it is broken, the market will likely retreat into the $60s before moving higher to set a new all-time high. If not, the market will likely continue to increase without a significant retest of support and may reclaim the all-time high by early April, if not sooner.
