What Happened:

Shares of cybersecurity software maker Rapid7 (NASDAQ:RPD) jumped 15.6% in the morning session after the company reported second quarter earnings results, which impressed given the strong growth in customer count recorded. Its revenue narrowly outperformed Wall Street's estimates. On the other hand, its billings unfortunately missed analysts' expectations. Zooming out, this was still a decent, albeit mixed, quarter, showing the company is staying on track.

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What is the market telling us:

Rapid7's shares are very volatile and over the last year have had 14 moves greater than 5%. But moves this big are very rare even for Rapid7 and that is indicating to us that this news had a significant impact on the market's perception of the business.

The biggest move we wrote about over the last year was 3 months ago, when the stock dropped 21.2% on the news that the company reported first quarter earnings results. While revenue and EPS narrowly topped Wall Street's estimates, its full-year revenue guidance fell short, and was lowered. In addition, its free cash flow was down 54.3% from the previous quarter. Overall, this was a subpar quarter for Rapid7.

Rapid7 is down 33.1% since the beginning of the year, and at $36.77 per share it is trading 40.2% below its 52-week high of $61.47 from February 2024. Investors who bought $1,000 worth of Rapid7's shares 5 years ago would now be looking at an investment worth $667.83.

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