For Rubrik, It All Comes Down To One Level

The structure points lower into earnings, but one support level will determine whether the longer-term rally is still on track

Running, Right Into Earnings

Has anyone seen the SaaS-pocalypse? February called, and it wants its narrative back. Not one of the SaaS stocks I’ve been tracking is below the early February SaaS scare levels. But the kicker is all of those same stocks were deep into their declines for months, even up to a year, before the narrative came onto the scene. You know from reading Tech Cache, narratives don’t matter, and sentiment is already in motion well before a headline tries to lay its claim to a price movement. This is demonstrated no better than in Rubrik RBRK 0.00%↑, as it’s now finding the levels I laid out months ago, while it was searching for a bottom, with zero change to the fundamental outlook. The question is, what does it do after earnings?

Finally Here

Rubrik has been a favorite of mine, fundamentally and business-wise, in the cybersecurity sector. I’ve talked quite a bit about its genius business model, where it assumes the worst and prepares for it before it inevitably happens. Thus far, it has worked out well financially for it, as it comes into this earnings report having raised its guide to $366M in revenue for FQ1. I expect the company to come in much closer to $400M and raise the bar for future quarters above consensus again.

The bottom line is my expectations haven’t changed in terms of fundamental performance, except to go up. The only thing changing has been the stock price. The question is, why would the stock price change when the fundamentals haven’t? The answer is sentiment, and the particular spot in the count sentiment has found itself recently.