Morgan Stanley Lowers Rapid7, Qualys Targets

Morgan Stanley maintained Equal Weight rating on Rapid7, cut price target to $9 from $10, citing AI valuation compression.
Rapid7 Q1 revenue $209.7M down 0.3% YoY, ARR $832M down 0.6%, non‑GAAP operating income $24.4M, free cash flow $33.4M beating consensus.
Qualys Q1 revenue $175.6M up 9.8% YoY, channel revenue 17% growth to 52% of total, billings $168.3M up 8%, FY2026 revenue guidance raised to $724M (+8.2%).
Morgan Stanley cut Qualys price target to $96 from $117, lowering multiple to 8x FY2027 FCF from 11x, citing AI‑native competitor concerns.