# RSKD — Riskified Ltd.

## Company & Research Metadata

- **Company:** Riskified Ltd.
- **Ticker:** RSKD
- **Exchange:** NYSE
- **Sector / Industry:** Technology / merchant fraud and chargeback protection
- **Template version:** 2.7
- **Research date:** 2026-10-21
- **Valuation / score price snapshot:** $8.62 — 2026-11-03 regular-session close, America/New_York
- **Tracking tier:** Primary Watchlist
- **Owned:** No
- **Primary operating period reviewed:** Q2 2026
- **Historical period reviewed:** completed FY2024-FY2025; Q1 FY2026, Q2 FY2026, H1 FY2026
- **Latest investor presentation reviewed:** Results release and associated financial tables; no separate slide deck materially used
- **Latest earnings call reviewed:** Q2 2026, complete material Q&A
- **Latest post-earnings management commentary reviewed:** No separate later management presentation incorporated

- **Price snapshot date:** 2026-11-03

- **Price snapshot time / timezone:** Regular-session close, America/New_York (including exchange half-days)
- **Competitor / analyst-Q&A audit:** 2026-10-28; original operating, price and valuation snapshots retained.

## What's Changed Since Previous Review

**Current Review:** 2026-10-28

**Previous Review:** 2026-10-21

**Update Trigger:** Competitor relevance and analyst-Q&A correction

| Area | Previous View | Current View | Investment Impact |
|---|---|---|---|
| Competition | Preceding operating and comparable-company classifications | Product/customer/geographic boundaries corrected; direct rivals separated from substitutes, partners and valuation anchors | Corrects the competitive comparison; does not by itself re-underwrite the valuation |
| Analyst questions | Prior source-linked Q&A summaries | Complete questions and sentence-form management answers; all 4 existing rows retained | Improves readability while preserving the recorded exchange meaning |
| Valuation and scores | Approved operating/price snapshots, scenarios, scores and decisions | Preserved | No price refresh, rerank or change to valuation assumptions in this correction pass |

**Thesis:** No new fundamental thesis determination is made in this correction pass. The prior investment decision is preserved; the corrected competitive scope should govern the next substantive review.

## Investment Snapshot

| Metric | Current View |
|---|---|
| Price Snapshot | $8.62 — 2026-11-03 regular-session close, America/New_York |
| Rating / Zone Status | Avoid |
| Bear / Base / Bull Fair Value | $1.13 / $5.94 / $15.12 |
| Scenario Probabilities | 25% / 50% / 25% |
| Probability-Weighted Fair Value | $7.03 |
| Probability-Weighted Expected Return | -18.4% |
| Bear-Case Return | -86.9% |
| Strong Buy Zone | ≤ $1.24 |
| Buy Zone | >$1.24–$5.62 |
| Avoid Chasing Above | > $7.81 |
| Quality Score / Tier | 67.6 / Tier B |
| Opportunity Score / Rank | 32.1 / #61 of 76 |
| Risk Level | Medium-High |
| Tracking / Ownership | Primary Watchlist / Not Owned |

**Decision rationale:** RSKD is **Avoid** at $8.77, with -19.8% probability-weighted upside and -87.1% bear-case return. Better decisioning can increase merchant sales while lowering fraud costs, creating room for durable fees. Confidence is 48/100 because the earnings conversion, competitive and capital assumptions below remain conditional.

## Investment Thesis

Better decisioning can increase merchant sales while lowering fraud costs, creating room for durable fees. Q2 revenue grew 22%, its strongest growth in several years, but gross margin fell to approximately 46%. The debate is whether growth reflects attractive risk-adjusted merchant economics or lower-margin volume. Buybacks improve per-share value only if core profitability strengthens.

### What the Market May Be Mispricing

| Debate | Research judgment |
|---|---|
| Merchant retention and approval performance | Better decisioning can increase merchant sales while lowering fraud costs, creating room for durable fees. |
| Chargeback costs and gross profit per transaction | Approval rates, guaranteed chargeback costs, merchant retention and gross profit per transaction drive economics. |
| SBC-adjusted earnings and repurchase discipline | TTM FCF was approximately $46.6 million and SBC $45.8 million, leaving limited economic cash generation after compensation. |

## Business Overview

Riskified helps merchants approve legitimate online orders and manage fraud, chargebacks and policy abuse. Its chargeback-guarantee model combines decision software with financial exposure to covered losses. Revenue depends on merchant volume, contract pricing, product mix and risk selection. Integrations and accumulated transaction data support retention, but merchants can compare approval rates and economic outcomes across multiple providers.

### Business Takeaway

Riskified helps merchants approve legitimate online orders and manage fraud, chargebacks and policy abuse. Approval rates, guaranteed chargeback costs, merchant retention and gross profit per transaction drive economics.

## Industry, TAM & Market Share

E-commerce fraud and abuse remain persistent needs, with competition from specialists, payment platforms and in-house merchant tools. Total online sales are not directly monetizable TAM. Approval improvement and loss performance determine the economically addressable fee pool.

### Market-Share Analysis

Comparable same-definition share data for the subject and its principal rivals were not established. TAM estimates and company-specific volume measures are not treated as directly comparable market shares. The positioning analysis below is more reliable than a table of unmatched percentages.

#### Competitive Scale / Position

| Company / Platform | Primary Position | Relative Scale | Growth Direction | Investment Relevance |
|---|---|---|---|---|
| Forter (private) | Direct: merchant fraud decisions and identity/risk controls | Product scope; no matched operating-scale series | Competes for merchant risk budgets | Customer choice in the stated segment only |
| Signifyd (private) | Direct: commerce fraud protection and chargeback guarantees | Product scope; no matched operating-scale series | Competes on approval/loss economics | Customer choice in the stated segment only |
| Merchant/processor internal fraud tools | Substitute: in-house or bundled transaction screening | Product scope; no matched operating-scale series | Build-versus-buy and guarantee scope matter | Customer choice in the stated segment only |

### Industry Takeaway

Approval improvement and loss performance determine the economically addressable fee pool. The base case requires evidence of profitable adoption within that market.

## Customer Economics

Approval rates, guaranteed chargeback costs, merchant retention and gross profit per transaction drive economics. Higher revenue can be unattractive if risk costs rise faster. Competitive win rates are company-reported and should be tested against retention and realized margins.

### Customer-Economics Takeaway

The economic test is SBC-adjusted earnings and repurchase discipline. Competitive win rates are company-reported and should be tested against retention and realized margins.

## Competitive Landscape & Moat

### Competitive Landscape

Fraud-decision providers and covered-loss economics are the relevant comparison. PayPal and dLocal are removed as broad payment-volume proxies.

| Competitor | Market Share | Positioning | Advantages vs. Company | Disadvantages vs. Company | Current Direction |
|---|---|---|---|---|---|
| Forter (private) | No consistent comparable series | Direct: merchant fraud decisions and identity/risk controls | Transaction decisioning and merchant integrations | Guarantee terms and loss exposure differ by product | Competes for merchant risk budgets |
| Signifyd (private) | No consistent comparable series | Direct: commerce fraud protection and chargeback guarantees | Merchant guarantee and decision workflows | Pricing, approval rates and covered losses differ | Competes on approval/loss economics |
| Merchant/processor internal fraud tools | No consistent comparable series | Substitute: in-house or bundled transaction screening | Existing transaction integration and lower separate vendor spend | Merchant retains more operating/risk-management responsibility | Build-versus-buy and guarantee scope matter |

### Moat Assessment

Merchant integrations, transaction data and decisioning experience create moderate advantages. Forter and Signifyd remain important direct peers. Data is useful only if it leads to consistently better approval and loss outcomes.

**Moat direction:** Stable — an analytical judgment about product and distribution economics, not a measured market-share claim.

### Competitive Takeaway

Merchant integrations, transaction data and decisioning experience create moderate advantages. The direct rivals determine commercial pressure; diversified or sector anchors provide valuation context and are not substitutes for direct competition.

## Financial Profile

### Historical Financials

**Standardized period history (reviewed 2026-11-07):** Completed issuer fiscal years only, plus actually disclosed standalone quarters and cumulative YTD for the latest open FY. Currency USD, flows in millions, with fiscal dates defined by the issuer. Values marked derived come from disclosed period differences/sums, not TTM. Missing = N/D (not zero). Company-defined FCF includes capex and capitalized software; Q1 derived from first-half less Q2 as separately disclosed in the 2026 Q2 shareholder release.

| Period | Revenue | Growth | Gross Margin | Operating Margin | FCF | FCF Margin | SBC | Diluted Shares | Cash | Debt |
|---|---:|---:|---:|---:|---:|---:|---:|---:|---:|---:|
| FY2024 | 327.52 | 10.05% | 52.24% | -14.56% | 39.06 | 11.93% | 57.83 | 171 | 376.06 | 27.53 |
| FY2025 | 344.64 | 5.23% | 51.76% | -9.79% | 33.07 | 9.59% | 51.63 | 157 | 297.58 | 25.02 |
| Q1 FY2026 | $88.268M (derived from disclosed periods) | N/D | 52.0% | N/D | $9.02M (derived from disclosed periods) | 10.2% | $10.981M (derived from disclosed periods) | N/D | N/D | N/D |
| Q2 FY2026 | $98.691M | N/D | 45.6% | N/D | $12.934M | 13.1% | $10.373M | N/D | N/D | N/D |
| H1 FY2026 | $186.959M | N/D | 48.6% | N/D | $21.954M | 11.7% | $21.354M | N/D | N/D | N/D |

### Financial Takeaways

TTM FCF was approximately $46.6 million and SBC $45.8 million, leaving limited economic cash generation after compensation. Repurchases have reduced shares materially, but consume balance-sheet resources. The model uses sustainable diluted earnings after guarantee losses and ongoing compensation, rather than capitalizing the full cash balance and unadjusted FCF together.

**Financial direction:** Mixed — assess the reported trend alongside dilution and the balance sheet.

## Management & Capital Allocation

Management has improved growth and returned capital. It must demonstrate that new merchant wins maintain attractive risk-adjusted margins. Monitor repurchase pricing, compensation dilution and gross-profit growth rather than revenue alone.

### Management Takeaway

Monitor repurchase pricing, compensation dilution and gross-profit growth rather than revenue alone.

## Valuation

### Current Valuation

| Metric | Value |
|---|---|
| Price Snapshot | $8.62 — 2026-11-03 regular-session close, America/New_York |
| Market Capitalization | $1.16B |
| Enterprise Value | $957.93M |
| Trailing P/E | n/a |
| Provider forward P/E | 28.99 |
| EV / Sales | 2.60 |

### Comparable Company Analysis

| Company | Relevance | Public / Private | Forward P/E | EV / Sales | Growth / Margin / Risk Context |
|---|---|---|---|---|---|
| RSKD — Riskified Ltd. | Subject company | Public | 28.99 | 2.60 | merchant fraud and chargeback protection; 3Y revenue-growth estimate 12.92%; operating margin -5.73% |
| Forter; Signifyd | Direct operating competitor / substitute | Private | N/A | N/A | direct fraud decisions and transaction protection; no compatible standalone public multiple used |
| Merchant/processor internal fraud tools | Substitute: in-house or bundled transaction screening | Operating alternative / no standalone security | N/D — no matched snapshot collected | N/D — no matched snapshot collected | Build-versus-buy and guarantee scope matter |

**Comparable takeaway:** Fraud-decision providers and covered-loss economics are the relevant comparison. PayPal and dLocal are removed as broad payment-volume proxies. Quoted multiples retain their original dated snapshot; missing matched multiples are not estimated. Consolidated parent multiples do not isolate the competing product. No mechanical peer average is used.

The base terminal P/E is 22×, versus the provider's current forward P/E of 28.99×. Holding that quoted multiple constant on this model's 2029 EPS gives an illustrative present value of **$7.83**, versus the central base FV of **$5.94**. Earnings definitions differ, so this is a sensitivity check; it makes the dependence on a rerating or derating explicit.

### Valuation Scenarios

| Scenario | Key Assumptions | Fair Value | Probability | Probability Rationale | Return From Price Snapshot |
|---|---|---|---|---|---|
| Bear | 3Y revenue CAGR 6%; sustainable 2029 EPS $0.12 after compensation; 14× P/E; 14% discount rate; Risk costs and pricing pressure limit 2029 economic EPS to $0.12. | $1.13 | 25% | Execution, financing or competitive setbacks remain credible | -86.9% |
| Base | 3Y revenue CAGR 16%; sustainable 2029 EPS $0.40 after compensation; 22× P/E; 14% discount rate; Profitable merchant growth produces $0.40 of 2029 economic EPS. | $5.94 | 50% | Most likely operating trajectory, requiring measurable progress | -31.1% |
| Bull | 3Y revenue CAGR 25%; sustainable 2029 EPS $0.80 after compensation; 28× P/E; 14% discount rate; Strong product adoption and loss performance produce $0.80 of 2029 economic EPS. | $15.12 | 25% | Successful product conversion and operating leverage; not assured | +75.4% |
| **Probability-Weighted** | Sum of each scenario value × its probability | $7.03 | **100%** | Judgmental scenario probabilities | -18.4% |

### Valuation Takeaway

- **Primary valuation method:** Present value of sustainable 2029 equity earnings × scenario P/E, plus assumed interim dividends. The three-year discount horizon approximates late-2029 earning power.
- **Cross-check methods:** Direct competition, quoted peer multiples, current cash conversion, and the separate revenue/share/net-margin bridge in [the valuation workpaper](../valuation/watchlist_models_2026-10-21.md).
- **Key valuation dependencies:** Merchant retention and approval performance; Chargeback costs and gross profit per transaction; SBC-adjusted earnings and repurchase discipline. All forward figures are independent research assumptions, not company guidance or consensus.
- **Valuation confidence / Risk Level:** 48/100 / Medium-High. Scenario values are sensitive to sustainable earnings and terminal multiples.
- **Margin-of-safety conclusion:** Avoid at $8.77. New-file boundaries use Strong Buy = min(P/W FV ÷ 1.5, 1.1 × bear FV), Buy upper = P/W FV ÷ 1.25, Avoid above = P/W FV ÷ 0.90. Returns are to present fair value, not annualized returns or price targets for a particular date.

## Analyst Questions

The table consolidates related questions and follow-ups from each material participant in the complete call.

| Analyst / Firm | Core Question | Management Response | Research Read-Through |
|---|---|---|---|
| Ryan Tomasello / KBW | Why do revenue and volume growth differ as fraud exposure changes? | Management said new higher-risk business increases monetization. | Confirm that this opportunity converts into profitable recurring demand. |
| Connor Passarella / Truist | How does account abuse expand the product opportunity? | Management said broader identity context supports new products. | Confirm that this opportunity converts into profitable recurring demand. |
| Cris Kennedy / William Blair | What do retention and expansion indicate about acceleration? | Management said NRR is about 105% and new business drives acceleration. | Check repeat usage and cohort economics rather than initial sales alone. |
| Timothy Chiodo / UBS | What problem does the Marqeta partnership address? | Management said authorization friction extends beyond merchants' own decisions. | Confirm that this opportunity converts into profitable recurring demand. |

### Analyst-Q&A Takeaway

Higher-risk new business raises revenue faster than protected volume while pressuring gross margin. New customers lead growth; broader account-abuse products need to preserve underwriting and service economics.

## Thesis Monitoring

| Driver | Current State | Positive Trigger / Catalyst | Negative Trigger / Falsifier | What It Changes |
|---|---|---|---|---|
| Merchant retention and approval performance | Better decisioning can increase merchant sales while lowering fraud costs, creating room for durable fees. | Revenue trajectory sustains approximately 16% annual growth on a comparable basis | Growth remains below the 6% bear assumption over a full operating cycle | Revenue outlook and scenario probabilities |
| Chargeback costs and gross profit per transaction | Approval rates, guaranteed chargeback costs, merchant retention and gross profit per transaction drive economics. | After-cost earnings progress toward the base implied net margin of 8.9% | Competition, credit losses or service costs make that margin trajectory unattainable | Margins, moat score and valuation multiple |
| SBC-adjusted earnings and repurchase discipline | TTM FCF was approximately $46.6 million and SBC $45.8 million, leaving limited economic cash generation after compensation. | Financing and compensation remain consistent with 128.1M economic shares in the 2029 base case | Required capital or cumulative dilution materially exceeds the model without matching earnings | Financial score, confidence and downside value |

## Quality & Opportunity Scorecards

### Quality Score

| Component | Score | Weight | Weighted Contribution | Evidence |
|---|---|---|---|---|
| Business durability and economics | 65 | 25% | 16.3 | Approval rates, guaranteed chargeback costs, merchant retention and gross profit per transaction drive economics. |
| Moat and competitive position | 66 | 25% | 16.5 | Merchant integrations, transaction data and decisioning experience create moderate advantages. |
| Growth runway and durability | 73 | 20% | 14.6 | E-commerce fraud and abuse remain persistent needs, with competition from specialists, payment platforms and in-house merchant tools. |
| Financial quality and balance sheet | 72 | 15% | 10.8 | TTM FCF was approximately $46.6 million and SBC $45.8 million, leaving limited economic cash generation after compensation. |
| Management, governance and capital allocation | 63 | 15% | 9.5 | Management has improved growth and returned capital. |
| **Quality Score** | **67.6** | **100%** | **67.6** | Weighted score, independent of ownership and current price |

- **Quality Tier:** B
- **Speculative override:** None

### Opportunity Score

| Component | Raw Input | Normalized Score | Weight | Weighted Contribution |
|---|---|---|---|---|
| Quality | 67.6 | 67.6 | 30% | 20.3 |
| Probability-weighted upside | -18.4% | 13.1 | 35% | 4.6 |
| Bear-case downside | -86.9% | 0.0 | 20% | 0.0 |
| Risk / valuation confidence | 48 | 48.0 | 15% | 7.2 |
| **Opportunity Score** |  | **32.1** | **100%** | **32.1** |

- **Opportunity Rank:** #61 of 76
- **Zone Status:** Avoid

## Portfolio Context

- **Tracking tier:** Primary Watchlist
- **Owned:** No
- **Tracking source of truth:** `my_watchlist.md`
- **Portfolio source of truth:** `portfolio/holdings.md`
- **Scoring independence:** Ownership, account, shares, position size and cost basis do not change research, valuation, Quality, Opportunity, rank or zones.

## Investment Decision History

| Timestamp | Price | Rating | Zone Status | Buy Zone | Strong Buy Zone | Avoid Chasing Above | Base FV | P/W FV | P/W Return | Quality | Opportunity / Rank | Change / Rationale |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026-10-21 (America/New_York) | $8.77 | Avoid | Avoid | >$1.24–$5.62 | ≤ $1.24 | > $7.81 | $5.94 | $7.03 | -19.8% | 67.6 | 31.1 / #58 | Initial missing-file analysis; common-universe ranking; independent scenario assumptions |

---

## Material Sources

| Source | Type | Date / Period | What It Supports |
|---|---|---|---|
| [Riskified Reports Strong Second Quarter of 2026 with Accelerating Revenue Growth / Riskified](https://ir.riskified.com/news-releases/news-release-details/riskified-reports-strong-second-quarter-2026-accelerating) | Company IR / earnings filing | Q2 2026 | Latest operating results, guidance, products and financial supplement |
| [RSKD complete earnings-call transcript](https://stockanalysis.com/stocks/rskd/transcripts/655492-q2-2026/) | Transcript | Q2 2026 | Prepared remarks and all material Q&A exchanges |
| [RSKD regular-session historical price](https://stockanalysis.com/stocks/rskd/history/) | Market data | 2026-10-20 close | Common price used in returns, scores and zones |
| [RSKD valuation statistics](https://stockanalysis.com/stocks/rskd/statistics/) | Market data | 2026-10-20 close; ratios retrieved 2026-10-21 | Market capitalization, shares, quoted multiples and current ratios |
| [RSKD historical income statement](https://stockanalysis.com/stocks/rskd/financials/income-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical income statement; source-native currency and definitions |
| [RSKD historical balance sheet](https://stockanalysis.com/stocks/rskd/financials/balance-sheet/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical balance sheet; source-native currency and definitions |
| [RSKD historical cash flows](https://stockanalysis.com/stocks/rskd/financials/cash-flow-statement/) | Standardized financial statements | Latest reported period and two preceding fiscal years | Historical cash flows; source-native currency and definitions |
| [Issuer interim earnings / primary filing — RSKD](https://riskified.gcs-web.com/news-releases/news-release-details/riskified-reports-strong-second-quarter-2026-accelerating) | Issuer IR / regulatory exhibit | Current fiscal period through 2026-11-07 | Standalone period, SBC/FCF and financial definition provenance |