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RACKSPACE TECHNOLOGY INC (RXT) Stock Fundamental Analysis

NASDAQ:RXT - Nasdaq - US7501021056 - Common Stock - Currency: USD

1.18  +0.02 (+1.72%)

After market: 1.17 -0.01 (-0.85%)

Fundamental Rating

2

Overall RXT gets a fundamental rating of 2 out of 10. We evaluated RXT against 82 industry peers in the IT Services industry. RXT has a bad profitability rating. Also its financial health evaluation is rather negative. RXT is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

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1

1. Profitability

1.1 Basic Checks

In the past year RXT has reported negative net income.
In the past year RXT had a positive cash flow from operations.
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

With a Return On Assets value of -9.78%, RXT is not doing good in the industry: 73.17% of the companies in the same industry are doing better.
Industry RankSector Rank
ROA -9.78%
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

With a Gross Margin value of 19.45%, RXT is not doing good in the industry: 82.93% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of RXT has declined.
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 19.45%
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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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.
Compared to 5 years ago, RXT has more shares outstanding
Compared to 1 year ago, RXT has a worse debt to assets ratio.
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 -1.05, we must say that RXT is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of -1.05, RXT is not doing good in the industry: 89.02% of the companies in the same industry are doing better.
RXT has a debt to FCF ratio of 61.80. This is a negative value and a sign of low solvency as RXT would need 61.80 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 61.80, RXT is doing worse than 60.98% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 61.8
Altman-Z -1.05
ROIC/WACCN/A
WACC3.62%
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

RXT has a Current Ratio of 0.79. This is a bad value and indicates that RXT is not financially healthy enough and could expect problems in meeting its short term obligations.
RXT's Current ratio of 0.79 is on the low side compared to the rest of the industry. RXT is outperformed by 84.15% of its industry peers.
A Quick Ratio of 0.79 indicates that RXT may have some problems paying its short term obligations.
With a Quick ratio value of 0.79, RXT is not doing good in the industry: 82.93% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 0.79
Quick Ratio 0.79
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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3. Growth

3.1 Past

RXT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.50%, which is quite good.
Looking at the last year, RXT shows a decrease in Revenue. The Revenue has decreased by -6.14% in the last year.
RXT shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.34% yearly.
EPS 1Y (TTM)12.5%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%45.45%
Revenue 1Y (TTM)-6.14%
Revenue growth 3Y-3.11%
Revenue growth 5Y2.34%
Sales Q2Q%-3.68%

3.2 Future

The Earnings Per Share is expected to grow by 35.81% on average over the next years. This is a very strong growth
The Revenue is expected to grow by 5.45% on average over the next years.
EPS Next Y55.4%
EPS Next 2Y39.49%
EPS Next 3Y35.81%
EPS Next 5YN/A
Revenue Next Year-1.71%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.99%
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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4. Valuation

4.1 Price/Earnings Ratio

RXT reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
Besides the negative Price/Earnings Ratio, also the Forward Price/Earnings Ratio is negative for RXT. No positive earnings are expected for the next year.
Industry RankSector Rank
PE N/A
Fwd PE N/A
RXT Price Earnings VS Forward Price EarningsRXT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 50 -50 100

4.2 Price Multiples

RXT's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, RXT is valued cheaper than 96.34% of the companies in the same industry.
Industry RankSector Rank
P/FCF 5.42
EV/EBITDA 23.74
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

A more expensive valuation may be justified as RXT's earnings are expected to grow with 35.81% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y39.49%
EPS Next 3Y35.81%

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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 (6/6/2025, 8:26:25 PM)

After market: 1.17 -0.01 (-0.85%)

1.18

+0.02 (+1.72%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)05-08 2025-05-08/amc
Earnings (Next)08-06 2025-08-06/amc
Inst Owners74.58%
Inst Owner Change0.39%
Ins Owners1.51%
Ins Owner Change-7.62%
Market Cap280.12M
Analysts50.77
Price Target2.15 (82.2%)
Short Float %7.05%
Short Ratio6.33
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)2
Avg EPS beat(2)37.81%
Min EPS beat(2)26.66%
Max EPS beat(2)48.96%
EPS beat(4)4
Avg EPS beat(4)33.46%
Min EPS beat(4)25.56%
Max EPS beat(4)48.96%
EPS beat(8)8
Avg EPS beat(8)26.61%
EPS beat(12)12
Avg EPS beat(12)23.11%
EPS beat(16)16
Avg EPS beat(16)18.58%
Revenue beat(2)2
Avg Revenue beat(2)0.34%
Min Revenue beat(2)0.1%
Max Revenue beat(2)0.59%
Revenue beat(4)3
Avg Revenue beat(4)0.12%
Min Revenue beat(4)-0.87%
Max Revenue beat(4)0.67%
Revenue beat(8)4
Avg Revenue beat(8)0.13%
Revenue beat(12)6
Avg Revenue beat(12)-0.17%
Revenue beat(16)6
Avg Revenue beat(16)-0.25%
PT rev (1m)-28.53%
PT rev (3m)-28.53%
EPS NQ rev (1m)-10.42%
EPS NQ rev (3m)-10.42%
EPS NY rev (1m)-9.13%
EPS NY rev (3m)-0.55%
Revenue NQ rev (1m)-0.68%
Revenue NQ rev (3m)-0.68%
Revenue NY rev (1m)-0.04%
Revenue NY rev (3m)-0.15%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE N/A
P/S 0.1
P/FCF 5.42
P/OCF 1.96
P/B N/A
P/tB N/A
EV/EBITDA 23.74
EPS(TTM)-0.21
EYN/A
EPS(NY)-0.01
Fwd EYN/A
FCF(TTM)0.22
FCFY18.46%
OCF(TTM)0.6
OCFY51.05%
SpS11.42
BVpS-4.52
TBVpS-11.03
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -9.78%
ROE N/A
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 19.45%
FCFM 1.91%
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 Turnover0.91
Health
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 61.8
Debt/EBITDA 21.97
Cap/Depr 31.05%
Cap/Sales 3.37%
Interest Coverage N/A
Cash Conversion 101.42%
Profit Quality N/A
Current Ratio 0.79
Quick Ratio 0.79
Altman-Z -1.05
F-Score4
WACC3.62%
ROIC/WACCN/A
Cap/Depr(3y)28.19%
Cap/Depr(5y)27.02%
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)12.5%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%45.45%
EPS Next Y55.4%
EPS Next 2Y39.49%
EPS Next 3Y35.81%
EPS Next 5YN/A
Revenue 1Y (TTM)-6.14%
Revenue growth 3Y-3.11%
Revenue growth 5Y2.34%
Sales Q2Q%-3.68%
Revenue Next Year-1.71%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.99%
Revenue Next 5Y5.45%
EBIT growth 1Y4.08%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year143.69%
EBIT Next 3Y58.08%
EBIT Next 5Y37.34%
FCF growth 1Y-51.68%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-20.69%
OCF growth 3Y-52.4%
OCF growth 5Y-32.85%