Outstanding performance beats expectations but still faces selloff; Wall Street defends Rubrik (RBRK.US): long-term logic intact, market “can't see the forest for the trees”

According to Zhitong Finance APP, despite cybersecurity company Rubrik (RBRK.US) reporting its fiscal Q2 2027 results and future guidance that fully exceeded Wall Street expectations—with several analysts describing the performance as "impressive"—Rubrik's share price still fell rather than rose due to previously high investor expectations.

The earnings report showed that for the second fiscal quarter, Rubrik achieved revenue of $427.3 million, a 38% increase from $309.9 million in the same period last year, and above market expectations. Adjusted diluted earnings per share were $0.20, compared to a loss of $0.03 per share a year ago, marking the company's return to adjusted profitability.

Annual Recurring Revenue (ARR) from subscriptions, one of the core indicators most closely watched by the market, grew 32.6% year-on-year to $1.66 billion in the second fiscal quarter, above the company's prior guidance of $1.64 billion and surpassing market expectations for 31.0% growth. Notably, this growth rate slightly accelerated from Q1’s 32.5%, indicating that subscription business growth momentum remains strong.

Net new subscription ARR reached $96 million, up 35% year-on-year, significantly exceeding analysts’ expectations of $75.9 million. The company stated that its Q2 performance exceeded all the metrics it guided for.

Supported by strong quarterly results, Rubrik simultaneously raised its full-year outlook for fiscal 2027.

For the third fiscal quarter, the company expects revenue between $429 million and $431 million, above analysts' expectations of $418.3 million; adjusted earnings per share are forecasted at $0.07 to $0.09, higher than the market's $0.06 expectation.

For the entire fiscal year 2027, Rubrik raised its revenue guidance from the prior $1.64 billion–$1.65 billion range to $1.685 billion–$1.693 billion; adjusted earnings per share guidance was significantly increased from $0.07–$0.27 previously to $0.47–$0.53. By comparison, analysts had previously expected full-year revenue of $1.64 billion and adjusted earnings per share of $0.32.

In terms of ARR guidance, the company expects full-year subscription ARR to be between $1.88 billion and $1.89 billion, up from the previous range of $1.85 billion to $1.86 billion. The revised midpoint is $1.88 billion, up 28.8% year-on-year; the prior midpoint was $1.86 billion, representing 27.1% growth. The company explained that this upward adjustment reflects roughly $20 million in Q2 performance above prior guidance and the expectation of an additional $4.5 million increase in the second half of the year.

Wall Street Views: Long-Term Logic Intact, Short-Term Price Reaction "Can’t See the Forest for the Trees"

Despite the pre-market price drop, several Wall Street analysts remained bullish on Rubrik’s long-term prospects following the earnings report, suggesting that the market is magnifying short-term volatility due to concerns over certain details.

Jefferies analyst Joseph Gallo maintained a "Buy" rating on Rubrik with a price target of $120. In a client report, he wrote: "As a leader in cyber resilience, Rubrik is well positioned for long-term sustainable growth, driven by enduring tailwinds such as ransomware, SaaS/cloud workloads, and data growth." Gallo believes there is upside to consensus expectations for fiscal 2027 ARR and expects Rubrik’s subscription ARR growth rate to remain above 20% over the next few years, driven by growth in cloud ARR and cross-selling of SaaS/cloud workload protection, cyber resilience capabilities, and data/AI governance products.

Gallo acknowledged that Rubrik still lags behind cybersecurity peers of similar revenue scale on operating profitability, but he also pointed out that there is a “significant path to improvement” for the company.

BTIG analyst Gray Powell raised Rubrik’s price target from $109 to $125 and reaffirmed a "Buy" rating. Powell noted that even though market expectations were already high before the earnings release, Rubrik’s results "exceeded expectations across all key metrics."

Powell further commented: “In our view, Rubrik is benefiting from incremental cyber resilience demand driven by Mythos and broader AI advancements. The identity security business remains robust, and early data from Rubrik Agent Cloud is also promising.” He also responded to some market doubts. Some investors believe the guidance implies a slowdown in net new ARR in the second half of fiscal 2027, while others have concerns about the mix between cloud and non-cloud businesses. However, in Powell’s view, “these arguments can’t see the forest for the trees.”