Should You Buy, Sell, or Hold Rubrik Stock Before Q3 Earnings Release?

Core Insights - Rubrik (RBRK) is set to announce its third-quarter fiscal 2026 results on December 4, with expected revenues between $319 million and $321 million, indicating a year-over-year growth of 35% to 36% [1][9] - The Zacks Consensus Estimate for revenues stands at $320.93 million, reflecting a year-over-year increase of 35.88% [1][2] - The consensus estimate for loss is 17 cents per share, which has widened by a penny over the past month, compared to a loss of 21 cents per share in the same quarter last year [2] Revenue and Growth Expectations - Rubrik's fiscal third-quarter performance is anticipated to benefit from its strong position in the growing cyber resilience market and increasing demand for data security solutions [3] - The company has shown robust subscription Annual Recurring Revenue (ARR) growth, with a 27% year-over-year increase in customers with over $100K in subscription ARR, totaling 2,505 customers as of July 31, 2025 [4] - Cloud ARR grew by 57% year-over-year, reaching $1.1 billion, driven by the adoption of the Rubrik Security Cloud platform, which is expected to positively impact the upcoming quarter's performance [4][6] Subscription ARR and Margins - For the third quarter of fiscal 2026, Rubrik expects a non-GAAP subscription ARR contribution margin of approximately 6.5% [5] - The company anticipates subscription ARR growth in the upcoming quarter, with net new subscription ARR contributing approximately 21% to 22% of the full-year net new subscription ARR [5] Clientele and Partnerships - Rubrik's expanding clientele includes major players like Amazon Web Services (AWS), CrowdStrike, and Microsoft, which has been a key growth catalyst [12] - In November 2025, Rubrik announced a collaboration with AWS to enhance cyber resilience, integrating Rubrik's Preemptive Recovery Engine and Security Cloud with AWS's secure infrastructure [13] - The company also announced that Rubrik Agent Cloud will work with Microsoft Copilot Studio, facilitating secure scaling of AI agents [14] Competitive Landscape - Despite its expanding clientele, Rubrik faces stiff competition from Fortinet, which is enhancing its cybersecurity ecosystem [18] - Fortinet's partnership with Armis aims to provide a unified security ecosystem, increasing competition in the cybersecurity market [19] Market Performance - Rubrik shares have declined by 30.1% over the past six months, underperforming the broader Zacks Computer and Technology sector, which returned 27.8% [7] - The company's stock is considered to have a stretched valuation, with a forward 12-month Price/Sales ratio of 9.07X, significantly higher than the industry's 4.87X [10]