Rapid7 falls as Needham downgrades, citing increased competition, weakening economy
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Rapid7 (NASDAQ:RPD) shares fell on Friday as investment firm Needham downgraded the cybersecurity software company, citing increased competition and concerns from the global economy.
Needham analyst Alex Henderson lowered his rating to hold from buy, noting that companies like CrowdStrike (CRWD) and Palo Alto Networks (PANW) offer "richer, broader capabilities," while others, such as Tenable (TENB) and Qualys (QLYS) also appear to be gaining steam.
Rapid7 (RPD) shares fell nearly 5% to $43.10 in premarket trading.
In a separate note, Henderson upgraded Qualys (QLYS), noting it is looks as if it is "getting healthier and building out its sales capacity."
Henderson also noted that the broader macro conditions represent "incremental pressures" in areas such as commercial and mid-market. The analyst added that although Rapid7 (RPD) has "low" international exposure at just 25% of revenues, it has accounted for between 40% and 50% of it growth. 
"We think the economic pressures and tough comps set a challenging stage going into [full-year 2023]," Henderson explained, adding that the second-half of this year is also likely to be "challenging on a number of metrics." 
In late September, BTIG initiated coverage on Rapid7 (RPD), noting that its valuation is "compelling," but it has a lack of catalysts that could move the stock.
Analysts are largely positive on Rapid7 (RPD). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts also rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates RPD a HOLD.