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RACKSPACE TECHNOLOGY INC (RXT) Stock Fundamental Analysis

USA - NASDAQ:RXT - US7501021056 - Common Stock

1.37 USD
-0.08 (-5.52%)
Last: 9/15/2025, 4:02:01 PM
1.37 USD
0 (0%)
After Hours: 9/15/2025, 4:02:01 PM
Fundamental Rating

2

We assign a fundamental rating of 2 out of 10 to RXT. RXT was compared to 86 industry peers in the IT Services industry. Both the profitability and financial health of RXT have multiple concerns. RXT is valied quite expensively at the moment, while it does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

RXT had negative earnings in the past year.
RXT had a positive operating cash flow in the past year.
In the past 5 years RXT always reported negative net income.
RXT had a positive operating cash flow in each of the past 5 years.
RXT Yearly Net Income VS EBIT VS OCF VS FCFRXT Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M 400M -400M -600M -800M

1.2 Ratios

Looking at the Return On Assets, with a value of -12.73%, RXT is doing worse than 76.74% of the companies in the same industry.
Industry RankSector Rank
ROA -12.73%
ROE N/A
ROIC N/A
ROA(3y)-21.1%
ROA(5y)-14.12%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
RXT Yearly ROA, ROE, ROICRXT Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200 400

1.3 Margins

The Gross Margin of RXT (19.51%) is worse than 83.72% of its industry peers.
RXT's Gross Margin has declined in the last couple of years.
RXT does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 19.51%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-14.45%
GM growth 5Y-14.02%
RXT Yearly Profit, Operating, Gross MarginsRXT Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40

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0

2. Health

2.1 Basic Checks

RXT does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for RXT has been increased compared to 1 year ago.
RXT has more shares outstanding than it did 5 years ago.
RXT has a worse debt/assets ratio than last year.
RXT Yearly Shares OutstandingRXT Yearly Shares OutstandingYearly Shares Outstanding 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M 200M
RXT Yearly Total Debt VS Total AssetsRXT Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2018 2019 2020 2021 2022 2023 2024 2B 4B 6B

2.2 Solvency

Based on the Altman-Z score of -1.07, we must say that RXT is in the distress zone and has some risk of bankruptcy.
RXT's Altman-Z score of -1.07 is on the low side compared to the rest of the industry. RXT is outperformed by 84.88% of its industry peers.
RXT has a debt to FCF ratio of 59.48. This is a negative value and a sign of low solvency as RXT would need 59.48 years to pay back of all of its debts.
With a Debt to FCF ratio value of 59.48, RXT perfoms like the industry average, outperforming 40.70% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 59.48
Altman-Z -1.07
ROIC/WACCN/A
WACC3.8%
RXT Yearly LT Debt VS Equity VS FCFRXT Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2017 2018 2019 2020 2021 2022 2023 2024 0 1B -1B 2B 3B 4B

2.3 Liquidity

A Current Ratio of 0.77 indicates that RXT may have some problems paying its short term obligations.
RXT has a Current ratio of 0.77. This is amonst the worse of the industry: RXT underperforms 87.21% of its industry peers.
A Quick Ratio of 0.77 indicates that RXT may have some problems paying its short term obligations.
The Quick ratio of RXT (0.77) is worse than 86.05% of its industry peers.
Industry RankSector Rank
Current Ratio 0.77
Quick Ratio 0.77
RXT Yearly Current Assets VS Current LiabilitesRXT Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M 1B

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4

3. Growth

3.1 Past

RXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 26.92%, which is quite impressive.
RXT shows a decrease in Revenue. In the last year, the revenue decreased by -4.76%.
The Revenue has been growing slightly by 2.34% on average over the past years.
EPS 1Y (TTM)26.92%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%25%
Revenue 1Y (TTM)-4.76%
Revenue growth 3Y-3.11%
Revenue growth 5Y2.34%
Sales Q2Q%-2.72%

3.2 Future

RXT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 40.56% yearly.
The Revenue is expected to grow by 5.45% on average over the next years.
EPS Next Y18.42%
EPS Next 2Y43.47%
EPS Next 3Y40.56%
EPS Next 5YN/A
Revenue Next Year-1.96%
Revenue Next 2Y-0.2%
Revenue Next 3Y1.18%
Revenue Next 5Y5.45%

3.3 Evolution

The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
RXT Yearly Revenue VS EstimatesRXT Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 1B 2B 3B
RXT Yearly EPS VS EstimatesRXT Yearly EPS VS EstimatesYearly EPS VS Estimates 2020 2021 2022 2023 2024 2025 2026 2027 0 0.2 -0.2 0.4 0.6 0.8

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3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings Ratio is negative for RXT. In the last year negative earnings were reported.
The Price/Forward Earnings ratio is 90.43, which means the current valuation is very expensive for RXT.
RXT's Price/Forward Earnings is on the same level as the industry average.
When comparing the Price/Forward Earnings ratio of RXT to the average of the S&P500 Index (22.73), we can say RXT is valued expensively.
Industry RankSector Rank
PE N/A
Fwd PE 90.43
RXT Price Earnings VS Forward Price EarningsRXT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 20 40 60 80

4.2 Price Multiples

68.60% of the companies in the same industry are more expensive than RXT, based on the Enterprise Value to EBITDA ratio.
97.67% of the companies in the same industry are more expensive than RXT, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 6.11
EV/EBITDA 12.68
RXT Per share dataRXT EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 -5 10 -10

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
RXT's earnings are expected to grow with 40.56% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y43.47%
EPS Next 3Y40.56%

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0

5. Dividend

5.1 Amount

RXT does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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RACKSPACE TECHNOLOGY INC

NASDAQ:RXT (9/15/2025, 4:02:01 PM)

After market: 1.37 0 (0%)

1.37

-0.08 (-5.52%)

Chartmill FA Rating
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)08-07 2025-08-07/amc
Earnings (Next)11-10 2025-11-10/amc
Inst Owners17.77%
Inst Owner Change75.74%
Ins Owners2.84%
Ins Owner Change10.85%
Market Cap327.92M
Analysts49.09
Price Target1.67 (21.9%)
Short Float %5.03%
Short Ratio4.37
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)7.29%
Min EPS beat(2)-12.09%
Max EPS beat(2)26.66%
EPS beat(4)3
Avg EPS beat(4)24.05%
Min EPS beat(4)-12.09%
Max EPS beat(4)48.96%
EPS beat(8)7
Avg EPS beat(8)22.07%
EPS beat(12)11
Avg EPS beat(12)21.5%
EPS beat(16)15
Avg EPS beat(16)17.25%
Revenue beat(2)2
Avg Revenue beat(2)0.07%
Min Revenue beat(2)0.05%
Max Revenue beat(2)0.1%
Revenue beat(4)3
Avg Revenue beat(4)-0.04%
Min Revenue beat(4)-0.87%
Max Revenue beat(4)0.59%
Revenue beat(8)4
Avg Revenue beat(8)-0.01%
Revenue beat(12)7
Avg Revenue beat(12)0.13%
Revenue beat(16)7
Avg Revenue beat(16)-0.2%
PT rev (1m)2.89%
PT rev (3m)-22.53%
EPS NQ rev (1m)-34.23%
EPS NQ rev (3m)-153.16%
EPS NY rev (1m)-63.42%
EPS NY rev (3m)-82.93%
Revenue NQ rev (1m)0.04%
Revenue NQ rev (3m)-0.01%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-0.26%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 90.43
P/S 0.12
P/FCF 6.11
P/OCF 2.58
P/B N/A
P/tB N/A
EV/EBITDA 12.68
EPS(TTM)-0.19
EYN/A
EPS(NY)0.02
Fwd EY1.11%
FCF(TTM)0.22
FCFY16.38%
OCF(TTM)0.53
OCFY38.7%
SpS11.25
BVpS-4.67
TBVpS-10.99
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -12.73%
ROE N/A
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 19.51%
FCFM 1.99%
ROA(3y)-21.1%
ROA(5y)-14.12%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-14.45%
GM growth 5Y-14.02%
F-Score4
Asset Turnover0.93
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 59.48
Debt/EBITDA 11.43
Cap/Depr 18.51%
Cap/Sales 2.72%
Interest Coverage N/A
Cash Conversion 46.81%
Profit Quality N/A
Current Ratio 0.77
Quick Ratio 0.77
Altman-Z -1.07
F-Score4
WACC3.8%
ROIC/WACCN/A
Cap/Depr(3y)24.41%
Cap/Depr(5y)24.74%
Cap/Sales(3y)3.3%
Cap/Sales(5y)3.56%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)26.92%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%25%
EPS Next Y18.42%
EPS Next 2Y43.47%
EPS Next 3Y40.56%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.76%
Revenue growth 3Y-3.11%
Revenue growth 5Y2.34%
Sales Q2Q%-2.72%
Revenue Next Year-1.96%
Revenue Next 2Y-0.2%
Revenue Next 3Y1.18%
Revenue Next 5Y5.45%
EBIT growth 1Y16.97%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year145.33%
EBIT Next 3Y53.68%
EBIT Next 5Y37.34%
FCF growth 1Y-16.87%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-5.37%
OCF growth 3Y-52.44%
OCF growth 5Y-32.88%