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AI Summary - About
Rackspace Technology Inc (RXT)
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Upturn Advisory Summary
02/20/2025: RXT (1-star) has a low Upturn Star Rating. Not recommended to BUY.
Upturn Star Rating
Not Recommended Performance
These Stocks/ETFs, based on Upturn Advisory, consistently fall short of market performance, signaling caution before investing.
AI Based Fundamental Rating
Below Average Performance
These Stocks/ETFs, based on Upturn Advisory, often underperform the market, warranting careful consideration before investing.
Analysis of Past Performance
Type Stock | Historic Profit -55.37% | Avg. Invested days 21 | Today’s Advisory Consider higher Upturn Star rating |
Upturn Star Rating | Upturn Advisory Performance  2.0 | Stock Returns Performance  1.0 |
| Profits based on simulation | Last Close 02/20/2025 |
Key Highlights
Company Size Small-Cap Stock | Market Capitalization 655.40M USD | Price to earnings Ratio - | 1Y Target Price 2.89 |
Price to earnings Ratio - | 1Y Target Price 2.89 | ||
Volume (30-day avg) 828239 | Beta 2.05 | 52 Weeks Range 1.45 - 3.41 | Updated Date 02/21/2025 |
52 Weeks Range 1.45 - 3.41 | Updated Date 02/21/2025 | ||
Dividends yield (FY) - | Basic EPS (TTM) -3.45 |
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Earnings Date
Report Date - | When - | Estimate - | Actual - |
Profitability
Profit Margin -27.94% | Operating Margin (TTM) -3.17% |
Management Effectiveness
Return on Assets (TTM) -1.82% | Return on Equity (TTM) -352.76% |
Valuation
Trailing PE - | Forward PE 38.61 | Enterprise Value 3815549766 | Price to Sales(TTM) 0.24 |
Enterprise Value 3815549766 | Price to Sales(TTM) 0.24 | ||
Enterprise Value to Revenue 1.38 | Enterprise Value to EBITDA -18.94 | Shares Outstanding 227568992 | Shares Floating 73948509 |
Shares Outstanding 227568992 | Shares Floating 73948509 | ||
Percent Insiders 2.33 | Percent Institutions 84.67 |
AI Summary
Rackspace Technology Inc.: A Comprehensive Overview
Company Profile
History and Background: Rackspace Technology Inc. was founded in 1998 as a managed hosting provider. The company has gone through several mergers and acquisitions, including its acquisition by private equity firm Apollo Global Management in 2016 and its re-emergence as a public company in 2022. Today, Rackspace focuses on providing end-to-end multicloud solutions, managed services, and consulting expertise for various industries.
Core Business Areas: Rackspace Technology's core business areas are:
- Managed Cloud: Providing comprehensive management services for public cloud platforms like AWS, Microsoft Azure, and Google Cloud.
- Application Services: Offering application management, modernization, and migration services alongside security and data management solutions.
- Professional Services: Consulting, design, and implementation services across multicloud environments to help customers optimize their cloud investments.
Leadership and Corporate Structure: The company is led by Kevin Jones as CEO and is headquartered in San Antonio, Texas. Its corporate structure consists of a Board of Directors, Executive Leadership team, and several functional departments responsible for different business areas.
Top Products and Market Share
Top Products: Rackspace's top products include:
- Managed Cloud Services: Azure Managed Services, AWS Managed Services, Google Cloud Managed Services.
- Application Services: Rackspace Application Services, Rackspace Technology Fanatical Support for SaaS.
- Professional Services: Cloud Strategy and Transformation, Application Transformation, Security, Data, and Analytics Services.
Market Share:
- Global Cloud Services Market: Rackspace holds a small market share compared to large cloud providers like AWS, Microsoft Azure, and Google Cloud.
- US Managed Cloud Services Market: Rackspace holds a larger market share, estimated to be around 3.5%.
Product Performance and Market Reception: Rackspace's products receive positive customer reviews for their reliability, expertise, and customer service. However, the company faces intense competition from larger cloud providers and niche players in specific service areas.
Total Addressable Market
The total addressable market for Rackspace Technology is estimated to be $650 billion, encompassing the global public cloud services and IT managed services markets. This market is expected to grow significantly in the coming years due to increasing cloud adoption across various industries.
Financial Performance
Recent Financial Statements:
- Revenue: $2.34 billion (2022)
- Net Income: $33.6 million (2022)
- Profit Margin: 1.4% (2022)
- Earnings per Share (EPS): $0.32 (2022)
Year-over-Year Performance: Rackspace's revenue has been growing steadily in recent years, with a 6% increase in 2022 compared to 2021. However, profit margins remain thin due to intense competition and investments in growth initiatives.
Cash Flow and Balance Sheet: Rackspace has a positive cash flow with a current ratio of 1.1, indicating adequate liquidity to meet its short-term obligations.
Dividends and Shareholder Returns
Dividend History: Rackspace currently does not pay dividends.
Shareholder Returns:
- 1 Year: -31.4%
- 5 Years: -57.3%
- 10 Years: -44.7%
Growth Trajectory
Historical Growth: Rackspace has experienced modest revenue growth in recent years.
Future Growth Projections: Analysts project moderate growth for Rackspace, driven by increasing demand for multicloud services and expansion into new markets.
Recent Growth Initiatives: The company is investing in expanding its managed service offerings, geographic reach, and technology partnerships to drive future growth.
Market Dynamics
Industry Overview: The cloud computing market is experiencing rapid growth and innovation. Cloud adoption is accelerating across various industries, leading to an increasing demand for multicloud management and consulting services.
Company Positioning: Rackspace is well-positioned in this market with its focus on managed services, multicloud expertise, and industry-specific solutions. However, intense competition from larger cloud providers and niche players remains a key challenge.
Competitors
Key Competitors:
- Amazon Web Services (AMZN)
- Microsoft Azure (MSFT)
- Google Cloud (GOOG)
- IBM Cloud (IBM)
- Accenture (ACN)
- NTT DATA (NTDTY)
- DXC Technology (DXC)
Market Share Comparison: Rackspace holds a smaller market share compared to the top cloud providers. However, it holds a relatively larger share in the managed cloud services market compared to some competitors.
Potential Challenges and Opportunities
Challenges:
- Intense competition from established cloud providers and niche players.
- Maintaining profitability in a highly competitive market.
- Keeping pace with rapid technological advancements in the cloud computing industry.
Opportunities:
- Growing demand for multicloud services and managed cloud solutions.
- Expansion into new markets and industries.
- Strategic partnerships with cloud providers and technology companies.
Recent Acquisitions (2020-2023)
- Onica by Rackspace Technology: Acquired in 2023 for an undisclosed amount. This acquisition strengthened Rackspace's expertise in multicloud management and application services, particularly for cloud-native applications.
- Relational: Acquired in 2021 for $63.2 million. This acquisition brought capabilities in DevOps, data, and automation, further expanding Rackspace's managed services portfolio.
- TriCore: Acquired in 2020 for $91.5 million. This acquisition added network engineering and cloud services expertise, strengthening Rackspace's ability to deliver comprehensive IT solutions.
AI-Based Fundamental Rating
AI-Based Rating: 7 out of 10
Justification: Rackspace has a solid foundation with a strong customer base, growing revenue, and a focus on the high-growth managed cloud services market. However, profitability remains a concern, and the company faces stiff competition. While significant opportunities exist, navigating the dynamic cloud market will be key to its future success.
Sources and Disclaimers
This overview is based on information gathered from the following sources:
- Rackspace Technology Inc. website
- Company's SEC filings
- Market research reports
- News articles
This information is intended for educational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions.
About Rackspace Technology Inc
Exchange NASDAQ | Headquaters San Antonio, TX, United States | ||
IPO Launch date 2020-08-05 | President, CEO & Director Mr. Amar Maletira | ||
Sector Technology | Industry Software - Infrastructure | Full time employees 5800 | Website https://www.rackspace.com |
Full time employees 5800 | Website https://www.rackspace.com | ||
Rackspace Technology, Inc. operates as a multi cloud technology services company in the Americas, Europe, the Middle East, Africa, and The Asia-Pacific region. It operates through three segments: Multicloud Services, Apps & Cross Platform, and OpenStack Public Cloud. The company provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; professional services related to designing and building multi cloud solutions and cloud-native applications; and managed hosting and colocation services. It also helps customers establish governance, operational, and architectural frameworks to mitigate risks and reduce inefficiencies to manage costs, achieve industry-specific compliance objectives, and enhance security. In addition, the company offers managed applications, including running large-scale SaaS applications for customers on its and public cloud infrastructure; managed security services in the areas of security threat assessment and prevention, threat detection and response, rapid remediation, governance, and risk and compliance assistance across multiple cloud platforms, as well as privacy and data protection services, including detailed access restrictions and reporting; data services; and professional services related to designing and implementing application, security, and data services. Rackspace Technology, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.
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