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RACKSPACE TECHNOLOGY INC (RXT) Stock Fundamental Analysis

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

1.28  -0.04 (-3.03%)

Premarket: 1.25 -0.03 (-2.34%)

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 may be in some trouble as it scores bad on both profitability and health. While showing a medium growth rate, RXT is valued expensive at the moment.


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.
RXT had negative earnings in each of the past 5 years.
Each year in the past 5 years RXT had a positive operating cash flow.
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

The Return On Assets of RXT (-9.78%) is worse than 73.17% of its industry peers.
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

RXT has a worse Gross Margin (19.45%) than 82.93% of its industry peers.
In the last couple of years the Gross Margin of RXT has declined.
The Profit Margin and Operating Margin are not available for RXT so they could not be analyzed.
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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0

2. Health

2.1 Basic Checks

RXT does not have a ROIC to compare to the WACC, probably because it is not profitable.
Compared to 1 year ago, RXT has more shares outstanding
Compared to 5 years ago, RXT has more shares outstanding
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 -1.04, we must say that RXT is in the distress zone and has some risk of bankruptcy.
RXT has a Altman-Z score of -1.04. This is amonst the worse of the industry: RXT underperforms 86.59% of its industry peers.
The Debt to FCF ratio of RXT is 61.80, which is on the high side as it means it would take RXT, 61.80 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of RXT (61.80) is worse than 60.98% of its industry peers.
Industry RankSector Rank
Debt/Equity N/A
Debt/FCF 61.8
Altman-Z -1.04
ROIC/WACCN/A
WACC3.69%
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.
With a Current ratio value of 0.79, RXT is not doing good in the industry: 85.37% of the companies in the same industry are doing better.
RXT has a Quick 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.
Looking at the Quick ratio, with a value of 0.79, RXT is doing worse than 84.15% of the companies in the same industry.
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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4

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 12.50% over the past year.
The Revenue has decreased by -6.14% in the past year.
The Revenue has been growing slightly by 2.34% on average over the past years.
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

RXT is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 34.39% yearly.
Based on estimates for the next years, RXT will show a small growth in Revenue. The Revenue will grow by 5.45% on average per year.
EPS Next Y50.08%
EPS Next 2Y43.13%
EPS Next 3Y34.39%
EPS Next 5YN/A
Revenue Next Year-2.03%
Revenue Next 2Y-0.29%
Revenue Next 3Y0.99%
Revenue Next 5Y5.45%

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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

RXT reported negative earnings for the last year, which makes the Price/Earnings Ratio negative.
RXT is valuated quite expensively with a Price/Forward Earnings ratio of 101.39.
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 (37.11), we can say RXT is valued expensively.
Industry RankSector Rank
PE N/A
Fwd PE 101.39
RXT Price Earnings VS Forward Price EarningsRXT Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 20 40 60 80 100

4.2 Price Multiples

RXT's Enterprise Value to EBITDA is on the same level as the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of RXT indicates a rather cheap valuation: RXT is cheaper than 96.34% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF 5.88
EV/EBITDA 23.91
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 RXT does not grow enough to justify the current Price/Earnings ratio.
RXT's earnings are expected to grow with 34.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y43.13%
EPS Next 3Y34.39%

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0

5. Dividend

5.1 Amount

No dividends for RXT!.
Industry RankSector Rank
Dividend Yield N/A

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RACKSPACE TECHNOLOGY INC

NASDAQ:RXT (7/29/2025, 8:18:30 PM)

Premarket: 1.25 -0.03 (-2.34%)

1.28

-0.04 (-3.03%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)05-08 2025-05-08/amc
Earnings (Next)08-07 2025-08-07/amc
Inst Owners17.52%
Inst Owner Change0.34%
Ins Owners2.68%
Ins Owner Change-5.57%
Market Cap303.86M
Analysts48.33
Price Target1.62 (26.56%)
Short Float %6.88%
Short Ratio5.01
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)-0.78%
PT rev (3m)-46.19%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.42%
EPS NY rev (1m)0%
EPS NY rev (3m)-22.15%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.48%
Valuation
Industry RankSector Rank
PE N/A
Fwd PE 101.39
P/S 0.11
P/FCF 5.88
P/OCF 2.12
P/B N/A
P/tB N/A
EV/EBITDA 23.91
EPS(TTM)-0.21
EYN/A
EPS(NY)0.01
Fwd EY0.99%
FCF(TTM)0.22
FCFY17.01%
OCF(TTM)0.6
OCFY47.06%
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 -1.04
F-Score4
WACC3.69%
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 Y50.08%
EPS Next 2Y43.13%
EPS Next 3Y34.39%
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-2.03%
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%