Why Rapid7 (RPD) Is Plunging in 2025?

We recently published a list of Why These 15 Cybersecurity Stocks Are Plunging In 2025. In this article, we are going to take a look at where Rapid7, Inc. (NASDAQ:RPD) stands against other cybersecurity stocks that are plunging in 2025.

Cybersecurity stocks ranked among the hottest names on the stock market for years as these companies have been riding a wave of cyber threats and have easily acquired clients. Moreover, AI made them even hotter. These companies delivered jaw-dropping growth as businesses scrambled to protect their data from extremely sophisticated attacks.

Even in this environment, many are still posting very impressive revenue figures. Their services remain in high demand because cybercrime shows no signs of slowing down. Yet despite this strength, their stock prices have taken a nosedive this year. Unfortunately, there’s a lot of pessimism surrounding AI and connected themes like cybersecurity.

Wall Street is pulling back on these names, and the shift has dragged down some stocks that were market darlings just a few months before. It’s a good idea to look into the cybersecurity stocks that have been sold off the most, as there are likely buying opportunities here.

For this article, I screened the worst-performing cybersecurity stocks year-to-date.

I will also mention the number of hedge fund investors in these stocks. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

A computer engineer analyzing a server network for cyber security threats.

Number of Hedge Fund Holders In Q4 2024: 45

Rapid7, Inc. (NASDAQ:RPD) is a cybersecurity company that provides software and services.

The stock is down significantly so far in 2025 as Rapid7, Inc. (NASDAQ:RPD) reported disappointing fourth-quarter 2024 results, with revenue growth guidance for 2025 projected at only 2% to 3%.

These growth numbers are a sharp deceleration from the 9% growth achieved in 2024. This weak outlook led to a drop.

Professional services revenue declined by 5%, and earnings fell below expectations due to shrinking margins.

The consensus price target of $39.94 implies 36.8% upside.

RPD stock is down 27.42% year-to-date.

Overall, RPD ranks 6th on our list of cybersecurity stocks that are plunging in 2025. While we acknowledge the potential of RPD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than RPD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.