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Rapid7 earnings quality score

How much of the reported profit is backed by cash, and how many markers of managed earnings the filings show

Score63 / 100 · grade C · rank 633 of 1027

Rapid7 (RPD) scores 63 of 100 for earnings quality, grade C: rank 633 of 1027 companies and 140 of 203 in technology. It loses the most points on adjusted earnings 88% below GAAP, Montier C-score 2 of 4 checks failed, accruals of -7.7% of assets, lower than 75% of companies (profit backed by cash). It earns full or near-full marks for discretionary accruals of -0.2% of assets (modified Jones), smaller than most, profit about as variable as cash flow (smoothness 1.83).

What earned and lost points

ComponentWhat the filings showPointsOf
Accrualsaccruals of -7.7% of assets, lower than 75% of companies (profit backed by cash)2229
Montier C-scoreMontier C-score 2 of 4 checks failed1121
Discretionary accrualsdiscretionary accruals of -0.2% of assets (modified Jones), smaller than most1414
Piotroski F-scorePiotroski F-score 6 of 91014
Non-GAAP gapadjusted earnings 88% below GAAP014
Earnings smoothnessprofit about as variable as cash flow (smoothness 1.83)77
RPD: share of the available points, by componentRPD: share of the available points, by componentAccruals76%Discretionary accruals97%Montier C-score50%Piotroski F-score66%Earnings smoothness100%

How the score is built

Eight published measures, each scored against the whole universe or on its own scale and weighted: accruals 20, discretionary accruals 10, Beneish M 15, Dechow F 15, Montier C 15, Piotroski F 10, the non-GAAP gap 10, smoothness 5. A measure that cannot be computed (Beneish for a bank, say) drops out and the rest is rescaled, so every company is scored on what applies to it.

Every company ranked → The full quality workbench, live → Rapid7: cash flow →

Computed from the companies’ own XBRL filings (latest fiscal year) by published formulas; a statistical screen, not an audit or an accusation. A low score means the reported profit shows more of the markers of managed or low-quality earnings than its peers. Not investment advice.