| Snowflake Score | |
|---|---|
| Valuation | 5/6 |
| Future Growth | 0/6 |
| Past Performance | 0/6 |
| Financial Health | 3/6 |
| Dividends | 0/6 |
RXT Stock Overview
Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide.
Rackspace Technology Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$7.20 |
| 52 Week High | US$20.29 |
| 52 Week Low | US$5.99 |
| Beta | 0 |
| 1 Month Change | -19.46% |
| 3 Month Change | -34.61% |
| 1 Year Change | -63.75% |
| 3 Year Change | n/a |
| 5 Year Change | n/a |
| Change since IPO | -56.07% |
Recent News & Updates
Rackspace Technology: Deep In Busted IPO Territory
Shares of multicloud services provider Rackspace Technology, Inc. have fallen over 55% from their IPO price owing to concerns over operating margins. The company is undergoing a transition from higher-margin legacy businesses to lower-margin but faster-growing and less operating expense-intensive managed public cloud service business. Trading at 12.3x FY22 EPS, this busted IPO merited further investigation. A full investment analysis follows in the paragraphs below.
Shareholder Returns
| RXT | US IT | US Market | |
|---|---|---|---|
| 7D | 11.1% | 8.9% | 6.6% |
| 1Y | -63.7% | -32.0% | -18.4% |
Return vs Industry: RXT underperformed the US IT industry which returned -32% over the past year.
Return vs Market: RXT underperformed the US Market which returned -18.4% over the past year.
Price Volatility
| RXT volatility | |
|---|---|
| RXT Average Weekly Movement | 11.0% |
| IT Industry Average Movement | 10.1% |
| Market Average Movement | 8.1% |
| 10% most volatile stocks in US Market | 16.6% |
| 10% least volatile stocks in US Market | 3.2% |
Stable Share Price: RXT is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 11% a week.
Volatility Over Time: RXT's weekly volatility (11%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 1998 | 6,600 | Kevin Jones | https://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
| RXT fundamental statistics | |
|---|---|
| Market Cap | US$1.52b |
| Earnings (TTM) | -US$192.80m |
| Revenue (TTM) | US$3.06b |
0.5x
P/S Ratio-7.9x
P/E RatioIs RXT overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| RXT income statement (TTM) | |
|---|---|
| Revenue | US$3.06b |
| Cost of Revenue | US$2.09b |
| Gross Profit | US$965.30m |
| Other Expenses | US$1.16b |
| Earnings | -US$192.80m |
Last Reported Earnings
Mar 31, 2022
Next Earnings Date
n/a
| Earnings per share (EPS) | -0.91 |
| Gross Margin | 31.56% |
| Net Profit Margin | -6.30% |
| Debt/Equity Ratio | 260.6% |
How did RXT perform over the long term?
See historical performance and comparisonValuation
Is RXT undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
5/6Valuation Score 5/6
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio
Key Valuation Metric
Which metric is best to use when looking at relative valuation for RXT?
Other financial metrics that can be useful for relative valuation.
| What is RXT's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$1.52b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 1.7x |
| Enterprise Value/EBITDA | 8.4x |
| PEG Ratio | n/a |
Price to Sales Ratio vs Peers
How does RXT's PS Ratio compare to its peers?
| RXT PS Ratio vs Peers |
|---|
| Company | PS | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 3.3x |
Price-To-Sales vs Peers: RXT is good value based on its Price-To-Sales Ratio (0.5x) compared to the peer average (3.3x).
Price to Earnings Ratio vs Industry
How does RXT's PE Ratio compare vs other companies in the U.S. IT Industry?
Price-To-Sales vs Industry: RXT is good value based on its Price-To-Sales Ratio (0.5x) compared to the US IT industry average (2.5x)
Price to Sales Ratio vs Fair Ratio
What is RXT's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PS Ratio | 0.5x |
| Fair PS Ratio | 2x |
Price-To-Sales vs Fair Ratio: RXT is good value based on its Price-To-Sales Ratio (0.5x) compared to the estimated Fair Price-To-Sales Ratio (2x).
Share Price vs Fair Value
What is the Fair Price of RXT when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: RXT ($7.2) is trading below our estimate of fair value ($15.56)
Significantly Below Fair Value: RXT is trading below fair value by more than 20%.
Price to Earnings Growth Ratio
PEG Ratio: Insufficient data to calculate RXT's PEG Ratio to determine if it is good value.
Discover undervalued companies
Future Growth
How is Rackspace Technology forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?
Future Growth Score
0/6Future Growth Score 0/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
69.7%
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 (8.2% per year) is forecast to grow slower than the US market (8.4% per year).
High Growth Revenue: RXT's revenue (8.2% 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 (14.8%).
Discover growth companies
Past Performance
How has Rackspace Technology performed over the past 5 years?
Past Performance Score
0/6Past Performance Score 0/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
-4.2%
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 4.2% 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 (21.4%).
Return on Equity
High ROE: RXT has a negative Return on Equity (-14.34%), as it is currently unprofitable.
Discover strong past performing companies
Financial Health
How is Rackspace Technology's financial position?
Financial Health Score
3/6Financial Health Score 3/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway
Financial Position Analysis
Short Term Liabilities: RXT's short term assets ($1.0B) exceed its short term liabilities ($817.5M).
Long Term Liabilities: RXT's short term assets ($1.0B) do not cover its long term liabilities ($4.1B).
Debt to Equity History and Analysis
Debt Level: RXT's net debt to equity ratio (240%) 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, due to free cash flow being positive and growing by 18.6% per year.
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Dividend
What is Rackspace Technology current dividend yield, its reliability and sustainability?
Dividend Score
0/6Dividend Score 0/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage
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.
Earnings Payout to Shareholders
Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: Unable to calculate sustainability of dividends as RXT has not reported any payouts.
Discover strong dividend paying companies
Management
How experienced are the management team and are they aligned to shareholders interests?
1.5yrs
Average management tenure
CEO
Kevin Jones (52 yo)
3.17yrs
Tenure
US$35,270,070
Compensation
Mr. Kevin M. Jones serves as Member of Advisory Board at Medecision, Inc. He serves as a Director of Rackspace Technology, Inc. since April 2019 and its Chief Executive Officer since April 24, 2019. Mr. Jo...
CEO Compensation Analysis
Compensation vs Market: Kevin's total compensation ($USD35.27M) is above average for companies of similar size in the US market ($USD5.47M).
Compensation vs Earnings: Kevin's compensation has increased whilst the company is unprofitable.
Leadership Team
Experienced Management: RXT's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.
Board Members
Experienced Board: RXT's board of directors are considered experienced (5.5 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.
Ownership Breakdown
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
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
- Implied Market Cap: US$1.518b
- Shares outstanding: 210.86m
- 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
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/06/26 00:00 |
| End of Day Share Price | 2022/06/24 00:00 |
| Earnings | 2022/03/31 |
| Annual Earnings | 2021/12/31 |
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.