RBRK is overpriced relative to fair value; maintain hold rating despite improved sentiment, waiting for a better entry point.

Cybersecurity firm Rubrik announced a 37% increase in subscription revenue, and the management team attributed this success to companies seeking to enhance their resilience against proxy artificial intelligence.

According to the management team, or what was said about the company's most recent completed performance report: "Demand for AI proxy cyber resilience is accelerating as organizations face the double threat of AI-coordinated attacks and autonomous proxy overreach."

Of course, we are seeing an increasing spread of the use of proxy artificial intelligence by individuals and organizations. So, Rubrick is in the right place at the right time .

But does this make its shares a buying opportunity?

You can see that this cybersecurity company's revenue has grown to $1.54 billion in the past twelve months. This represents more than double the revenue it generated at the beginning of 2024, when its revenue for the previous twelve months was less than $600 million.

Given that subscription revenues accelerated by 30-40%, and management's expectation of similar improvement rates for the full fiscal year , with the continued spread of proxy AI, it is neither surprising nor unreasonable to assume that Rubrick's revenues will continue to grow at double-digit rates for the foreseeable future.

Rubric is losing money on a net profit level, but profit margins are improving. The operating profit margin for the past twelve months was negative 18.3%. However, if the company continues to grow at these rates, it is reasonable to assume that its operating profit margin could approach 20, 30, or even 40% when a wider range is achieved .

Similar to its operating profit margin , its return on invested capital is negative at 40%, but similar to its operating margin, it shows a marked improvement. Again, we don't have much data on Rubrick given that it's a relatively new company in the public markets, but if you compare it to some of the larger cybersecurity firms like Fortinet and Palo Alto Networks, the industry-wide return on investment could be excellent when you reach a wider scale.

Therefore, it is showing good progress towards this goal, but it has not yet reached it , and it needs to demonstrate sustained success not just for a quarter or two, not just for a year or two, but for five, six or seven years to reach the scale large enough to achieve profitability and rewarding returns for investors.

Therefore, given that it is a smaller, fast-growing company with large initial investments, its valuation is high, trading at a forward price-to-earnings ratio of 115.

I rated almost every cybersecurity stock as a buy heading into 2026. Rubrick was actually one of the few I didn't rated as a buy, along with CrowdStrike , another company I didn't rated as a buy for 2026.

So looking at the valuation from a discounted cash flow perspective paints a similar picture, which is that this stock is overpriced. At $88 per share, it is about 22% more expensive than my fair value estimate of $68 per share.

Whether you look at the price-to-earnings ratio or the discounted cash flow, Rubrick stock looks expensive .

So, Rubrick got off to a bad start in 2026. Its stock price plummeted to below $50 per share and approached $40, but since April its stock price has risen from about $45 to about $89. So, the stock price has doubled since April.

As I mentioned, I did not rate Rubrick stock as a buy opportunity for 2026. In fact, I rated it as a "hold" with a moderate conviction level , and my last update for it was on January 1st.

Therefore, I will repeat this classification today. I feel slightly better about Rubrick. I am slightly more optimistic about the stock than I was at the start of 2026, but still , given the valuation divergence, I will wait for a better opportunity to buy this cybersecurity stock.