Here's Why IPO Stock Rubrik Skyrocketed to an All-Time High Today

With its initial public offering (IPO) only happening back in April, cybersecurity company Rubrik (NYSE: RBRK) is waisting no time getting the attention of investors. As of 3:30 p.m. ET on Friday, Rubrik stock was up a whopping 25%, hitting an all-time high, after reporting financial results for its fiscal third quarter of 2025.

One of the newest cybersecurity stocks

Rubrik believes it has a differentiated business in the cybersecurity space. It's trying to secure enterprise data wherever it is -- on the cloud or elsewhere. Whether it's truly unique might be debatable. But one thing that's for sure is that its customers seem to love it. Its Q3 revenue jumped a whopping 43% year over year to $236 million, which was far better than its 35% growth in the previous quarter.

Most of Rubrik's revenue is on a subscription basis. And those annualized numbers look good as well. Its annual recurring revenue (ARR) surpassed $1 billion in Q3, which is why management raised its full-year guidance. Previously, it believed its ARR would be $1,026 million to $1,032 million by the end of the fiscal year. Now it believes it will be $1,057 million to $1,061 million.

Wells Fargo analyst Andrew Nowinski raised his price target for Rubrik stock from $40 per share all the way up to $76 per share, according to The Fly. It was one of the largest price-target increases among the analyst community. And Nowinski reportedly said that he's expecting "strong growth and operating leverage" from the company, which is high praise from a prominent analyst.

Put Rubrik stock on a watch list, at least

Rubrik's operating leverage is something for investors to watch. The company ended its fiscal 2024 with $784 million in subscription ARR and turned in negative free cash flow of almost $25 million. It's ARR is now already over $1 billion, and it expects negative free cash flow of $39 million to $45 million.

That's slightly the wrong direction for profits, but the outflow isn't bad for a company that's scaling as fast as Rubrik. Moreover, it has over $600 million in cash and investments on the balance sheet, so there's no need to worry about financial stress for this company for a while. In short, Q3 was definitely a good report for the young company, and it's a company for investors to watch from here.

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Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.