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RXT

Rackspace TechnologyNasdaqGS:RXT Stock Report

Market Cap

US$3.1b

7D

-2.0%

1Y

-12.4%

Updated

24 Oct, 2021

Data

Company Financials +
RXT fundamental analysis
Snowflake Score
Valuation3/6
Future Growth0/6
Past Performance0/6
Financial Health3/6
Dividends0/6

RXT Overview

Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide.

Rackspace Technology Competitors

Accenture

NYSE:ACN

US$223.5b

International Business Machines

NYSE:IBM

US$114.6b

Equinix (REIT)

NasdaqGS:EQIX

US$73.7b

Cognizant Technology Solutions

NasdaqGS:CTSH

US$41.5b

Price History & Performance

Summary of all time highs, changes and price drops for Rackspace Technology
Historical stock prices
Current Share PriceUS$14.64
52 Week HighUS$13.07
52 Week LowUS$26.43
Beta0
1 Month Change4.65%
3 Month Change-20.99%
1 Year Change-12.44%
3 Year Changen/a
5 Year Changen/a
Change since IPO-10.68%

Recent News & Updates

Aug 09
Returns On Capital At Rackspace Technology (NASDAQ:RXT) Have Stalled

Returns On Capital At Rackspace Technology (NASDAQ:RXT) Have Stalled

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

RXTUS ITUS Market
7D-2.0%-0.7%1.7%
1Y-12.4%21.9%30.3%

Return vs Industry: RXT underperformed the US IT industry which returned 21.9% over the past year.

Return vs Market: RXT underperformed the US Market which returned 30.3% over the past year.

Price Volatility

Is RXT's price volatile compared to industry and market?
RXT volatility
RXT Beta0
Industry Beta1.18
Market Beta1

Stable Share Price: RXT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: RXT's weekly volatility (6%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19987,200Kevin Joneshttps://www.rackspace.com

Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide. It operates through Multicloud Services and Apps & Cross Platform segments. The company’s Multicloud Services segment provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; and professional services related to designing and building multi cloud solutions and cloud-native applications.

Rackspace Technology Fundamentals Summary

How do Rackspace Technology's earnings and revenue compare to its market cap?
RXT fundamental statistics
Market CapUS$3.06b
Earnings (TTM)-US$265.60m
Revenue (TTM)US$2.87b

1.1x

P/S Ratio

-11.5x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RXT income statement (TTM)
RevenueUS$2.87b
Cost of RevenueUS$1.87b
Gross ProfitUS$994.60m
ExpensesUS$1.26b
Earnings-US$265.60m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Nov 15, 2021

Earnings per share (EPS)-1.27
Gross Margin34.68%
Net Profit Margin-9.26%
Debt/Equity Ratio258.8%

How did RXT perform over the long term?

See historical performance and comparison

Valuation

Is Rackspace Technology undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RXT ($14.64) is trading below our estimate of fair value ($34.83)

Significantly Below Fair Value: RXT is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RXT is unprofitable, so we can't compare its PE Ratio to the US IT industry average.

PE vs Market: RXT is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate RXT's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: RXT is good value based on its PB Ratio (2.2x) compared to the US IT industry average (5.3x).


Future Growth

How is Rackspace Technology forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

72.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RXT is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: RXT is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: RXT is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: RXT's revenue (9% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: RXT's revenue (9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RXT's Return on Equity is forecast to be low in 3 years time (14.5%).


Past Performance

How has Rackspace Technology performed over the past 5 years?

-8.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RXT is currently unprofitable.

Growing Profit Margin: RXT is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: RXT is unprofitable, and losses have increased over the past 5 years at a rate of 8.9% per year.

Accelerating Growth: Unable to compare RXT's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: RXT is unprofitable, making it difficult to compare its past year earnings growth to the IT industry (35.6%).


Return on Equity

High ROE: RXT has a negative Return on Equity (-19.21%), as it is currently unprofitable.


Financial Health

How is Rackspace Technology's financial position?


Financial Position Analysis

Short Term Liabilities: RXT's short term assets ($885.2M) exceed its short term liabilities ($789.3M).

Long Term Liabilities: RXT's short term assets ($885.2M) do not cover its long term liabilities ($4.2B).


Debt to Equity History and Analysis

Debt Level: RXT's debt to equity ratio (258.8%) is considered high.

Reducing Debt: Insufficient data to determine if RXT's debt to equity ratio has reduced over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable RXT has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: RXT is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 13.4% per year.


Dividend

What is Rackspace Technology current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate RXT's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RXT's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RXT's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RXT's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RXT's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average management tenure


CEO

Kevin Jones (52 yo)

2.5yrs

Tenure

US$6,864,209

Compensation

Mr. Kevin M. Jones serves as Member of Advisory Board at Medecision, Inc. He serves as a Director of Rackspace Technology, Inc. since April 2019 and its Chief Executive Officer since April 24, 2019. Mr. Jo...


CEO Compensation Analysis

Compensation vs Market: Kevin's total compensation ($USD6.86M) is above average for companies of similar size in the US market ($USD5.18M).

Compensation vs Earnings: Kevin's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: RXT's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: RXT's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5%.


Top Shareholders

Company Information

Rackspace Technology, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Rackspace Technology, Inc.
  • Ticker: RXT
  • Exchange: NasdaqGS
  • Founded: 1998
  • Industry: Internet Services and Infrastructure
  • Sector: Software
  • Market Cap: US$3.062b
  • Shares outstanding: 209.13m
  • Website: https://www.rackspace.com

Number of Employees


Location

  • Rackspace Technology, Inc.
  • 1 Fanatical Place
  • City of Windcrest
  • San Antonio
  • Texas
  • 78218
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/24 22:22
End of Day Share Price2021/10/22 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.