Update shared on 14 Dec 2025
Fair value Decreased 13%Analysts have modestly raised their price target on Rackspace Technology, citing slightly stronger projected revenue growth and a lower expected future P/E multiple as key supports for their updated fair value estimate, which is moving from 1.75 dollars to 2.00 dollars despite a marginally higher discount rate.
What's in the News
- NiterraEMEA GmbH selected Rackspace Technology to lead a rapid migration to Google Cloud, consolidating three global data centers and moving its entire SAP environment in just two months with no operational disruption (client announcement).
- The Niterra project created a secure Google Cloud landing zone, transferred 4TB of SAP data across critical systems, and established ongoing managed services via Rackspace Modern Operations and Rackspace Application Services for SAP (client announcement).
- Rackspace Technology launched Rackspace AI launchpad, a managed service that helps organizations evaluate, pilot, and deploy AI workloads using secure, GPU-powered infrastructure and Kubernetes-based tooling (product announcement).
- Rackspace AI launchpad is built on the company’s AI Anywhere private cloud, offering a phased path from proof of concept to full-scale production for customers in sectors such as healthcare, BFSI, and energy, including a highlighted deployment at U.S. healthcare provider Compass (product announcement).
- Rackspace Technology issued fourth quarter 2025 guidance, projecting total revenue between 664 million dollars and 678 million dollars (corporate guidance).
Valuation Changes
- Fair Value: Raised modestly from 1.75 dollars to 2.00 dollars per share, reflecting a slightly more optimistic outlook.
- Discount Rate: Increased slightly from 12.32 percent to 12.50 percent, implying a marginally higher required return.
- Revenue Growth: Upgraded from approximately 1.96 percent to about 2.27 percent, indicating a modest improvement in expected top line expansion.
- Net Profit Margin: Trimmed slightly from roughly 7.00 percent to about 6.98 percent, signaling a marginally more conservative profitability assumption.
- Future P/E: Reduced meaningfully from about 3.94x to approximately 3.27x, pointing to a lower valuation multiple applied to projected earnings.
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