company background image
RXT

Rackspace Technology NasdaqGS:RXT Stock Report

Last Price

US$4.46

Market Cap

US$939.2m

7D

-18.9%

1Y

-68.4%

Updated

26 Sep, 2022

Data

Company Financials +
RXT fundamental analysis
Snowflake Score
Valuation5/6
Future Growth0/6
Past Performance0/6
Financial Health3/6
Dividends0/6

RXT Stock Overview

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

Rackspace Technology Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Rackspace Technology
Historical stock prices
Current Share PriceUS$4.46
52 Week HighUS$18.50
52 Week LowUS$4.19
Beta1.07
1 Month Change-6.69%
3 Month Change-39.40%
1 Year Change-68.39%
3 Year Changen/a
5 Year Changen/a
Change since IPO-72.79%

Recent News & Updates

Sep 26

Rackspace Technology names finance chief as CEO

Rackspace Technology (NASDAQ:RXT) named Monday its CFO Amar Maletira as its new chief executive officer to succeed former CEO Kevin Jones. Maletira has served as Rackspace's president and chief financial officer since Nov. 2020. The Texas-based cloud infrastructure company said Maletira will continue as the CFO while the search for permanent CFO is underway.  In addition, the company has reaffirmed its third quarter guidance to $769-$779M for revenue, vs. consensus of $773.15M; $733-$741M for core revenue; $0.08 - $0.10 for Non-GAAP EPS, vs. consensus of $0.09.

Shareholder Returns

RXTUS ITUS Market
7D-18.9%-7.8%-6.9%
1Y-68.4%-39.7%-23.7%

Return vs Industry: RXT underperformed the US IT industry which returned -39.2% over the past year.

Return vs Market: RXT underperformed the US Market which returned -23% over the past year.

Price Volatility

Is RXT's price volatile compared to industry and market?
RXT volatility
RXT Average Weekly Movement10.8%
IT Industry Average Movement8.0%
Market Average Movement6.9%
10% most volatile stocks in US Market15.7%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
19986,600Kevin 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$939.21m
Earnings (TTM)-US$196.80m
Revenue (TTM)US$3.09b

0.3x

P/S Ratio

-4.8x

P/E Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
RXT income statement (TTM)
RevenueUS$3.09b
Cost of RevenueUS$2.14b
Gross ProfitUS$947.80m
Other ExpensesUS$1.14b
Earnings-US$196.80m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)-0.93
Gross Margin30.70%
Net Profit Margin-6.37%
Debt/Equity Ratio268.2%

How did RXT perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is RXT undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation 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

  • Analyst Forecast

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.

RXT key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1.5x
Enterprise Value/EBITDA7.7x
PEG Ration/a

Price to Sales Ratio vs Peers

How does RXT's PS Ratio compare to its peers?

RXT PS Ratio vs Peers
The above table shows the PS ratio for RXT vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPSEstimated GrowthMarket Cap
Peer Average2.3x
BIGC BigCommerce Holdings
4x16.7%US$1.0b
FSLY Fastly
2.5x13.2%US$989.8m
SWI SolarWinds
1.7x4.9%US$1.2b
VNET VNET Group
0.9x11.3%US$849.7m
RXT Rackspace Technology
0.3x3.2%US$939.2m

Price-To-Sales vs Peers: RXT is good value based on its Price-To-Sales Ratio (0.3x) compared to the peer average (2.3x).


Price to Earnings Ratio vs Industry

How does RXT's PE Ratio compare vs other companies in the US IT Industry?

Price-To-Sales vs Industry: RXT is good value based on its Price-To-Sales Ratio (0.3x) compared to the US IT industry average (2.4x)


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.

RXT PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio0.3x
Fair PS Ratio1.5x

Price-To-Sales vs Fair Ratio: RXT is good value based on its Price-To-Sales Ratio (0.3x) compared to the estimated Fair Price-To-Sales Ratio (1.5x).


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 ($4.46) is trading below our estimate of fair value ($10.76)

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


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.


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

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


30.6%

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 (3.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: RXT's revenue (3.2% 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 (7.8%).


Discover growth companies

Past Performance

How has Rackspace Technology performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-3.1%

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 3.1% 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 (20.5%).


Return on Equity

High ROE: RXT has a negative Return on Equity (-15.16%), as it is currently unprofitable.


Discover strong past performing companies

Financial Health

How is Rackspace Technology's financial position?

Financial Health Score

3/6

Financial 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 ($822.8M).

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 (246.3%) 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 20.6% per year.


Discover healthy companies

Dividend

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

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage

Dividend Yield vs Market

Rackspace Technology Dividend Yield vs Market
How does Rackspace Technology dividend yield compare to the market?
SegmentDividend Yield
Company (Rackspace Technology)n/a
Market Bottom 25% (US)1.7%
Market Top 25% (US)4.7%
Industry Average (IT)1.6%
Analyst forecast in 3 Years (Rackspace Technology)0%

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?

1.8yrs

Average management tenure


CEO

Kevin Jones (53 yo)

3.42yrs

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

Kevin Jones's Compensation vs Rackspace Technology Earnings
How has Kevin Jones's remuneration changed compared to Rackspace Technology's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

-US$197m

Mar 31 2022n/an/a

-US$193m

Dec 31 2021US$35mUS$882k

-US$218m

Sep 30 2021n/an/a

-US$199m

Jun 30 2021n/an/a

-US$266m

Mar 31 2021n/an/a

-US$262m

Dec 31 2020US$7mUS$857k

-US$246m

Sep 30 2020n/an/a

-US$229m

Jun 30 2020n/an/a

-US$188m

Mar 31 2020n/an/a

-US$93m

Dec 31 2019US$28mUS$555k

-US$102m

Compensation vs Market: Kevin's total compensation ($USD35.27M) is above average for companies of similar size in the US market ($USD4.14M).

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 ( 1.8 years average tenure), which suggests a new team.


Board Members

Experienced Board: RXT's board of directors are considered experienced (5.8 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.


Ownership Breakdown

What is the ownership structure of RXT?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders21,457,9939.7%
Institutions69,269,68631.4%
VC/PE Firms129,609,00058.8%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 25 shareholders own 99.32% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
61.55%
Apollo Global Management, Inc.
129,609,000$578.1m0%4.14%
6.98%
First Trust Advisors LP
14,691,757$65.5m-14.02%0.08%
6.43%
Brian St. Jean
13,535,680$60.4m0%no data
4.65%
ABRY Partners, LLC
9,792,000$43.7m0%25.8%
3.41%
Mackenzie Financial Corporation
7,181,044$32.0m-0.23%0.05%
2.87%
The Vanguard Group, Inc.
6,052,465$27.0m14.38%no data
1.98%
BlackRock, Inc.
4,162,773$18.6m12.79%no data
1.32%
Legal & General Investment Management Limited
2,778,590$12.4m6.66%no data
1.27%
Rice Hall James & Associates, LLC
2,666,304$11.9m-2.37%0.66%
1.22%
Leeward Investments, LLC
2,578,488$11.5m-2.23%0.59%
1.07%
GO ETF Solutions LLP
2,261,651$10.1m0%0.16%
1.02%
Kevin Jones
2,146,699$9.6m-3.41%no data
0.88%
Amar Maletira
1,845,350$8.2m542.6%no data
0.57%
Geode Capital Management, LLC
1,209,560$5.4m5.91%no data
0.57%
Dimensional Fund Advisors LP
1,208,698$5.4m119.39%no data
0.55%
State Street Global Advisors, Inc.
1,160,078$5.2m3.34%no data
0.42%
Dharmendra Sinha
874,125$3.9m0%no data
0.39%
Boston Partners Global Investors, Inc.
817,888$3.6m1.15%no data
0.34%
Lapides Asset Management, LLC
719,200$3.2m-16.25%1.99%
0.34%
Millennium Management LLC
715,251$3.2m60.88%no data
0.34%
IG Investment Management, Ltd.
712,968$3.2m0%0.01%
0.31%
D. E. Shaw & Co., L.P.
651,378$2.9m81.48%0.01%
0.31%
Goldman Sachs Asset Management, L.P.
648,103$2.9m30.92%no data
0.28%
Hosking Partners LLP
596,176$2.7m-15.89%0.1%
0.26%
Northern Trust Global Investments
539,629$2.4m1.16%no data

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$939.206m
  • Shares outstanding: 210.58m
  • 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

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RXTNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDAug 2020

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/26 00:00
End of Day Share Price2022/09/26 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.