Rackspace Technology (RXT) AI Stock Analysis

• Market Cap: $344.68M
• Dividend Yield: N/A
• Average Volume (3M): 1.02M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.47
• Revenue Growth: -4.76%
• EPS Growth: 56.32%
• Country: US
• Employees: 5,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.06
• Shares Outstanding: 239,360,670
• 10 Day Avg. Volume: 1,281,555
• 30 Day Avg. Volume: 1,015,058
• PEG Ratio: 0.32
• Price to Book (P/B): -0.49
• Price to Sales (P/S): 0.18
• P/FCF Ratio: -6.98
• Enterprise Value/Market Cap: 10.22
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 6.70
• Enterprise Value/Ebitda: 37.66
• 1Y Price Target: $1.47
• Price Target Upside: -3.29% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

• Rating: 48 Neutral
• Price Target: $1.00 ▼(-34.21% Downside)

Rackspace Technology's overall stock score is primarily impacted by its weak financial performance, characterized by declining revenues and high leverage. While there are positive developments in strategic initiatives and leadership changes, these are overshadowed by the company's financial challenges and valuation concerns.

Positive Factors

Strategic Partnerships

The partnership with SMPL-C enhances Rackspace's position in the government sector, opening new contract opportunities and strengthening compliance services, which could drive long-term revenue growth.

AI and Cybersecurity Enhancements

The AI enhancements to the Cyber Defense Center improve Rackspace's cybersecurity offerings, potentially increasing customer trust and retention, and positioning the company as a leader in cloud security solutions.

Private Cloud Growth

Strong growth in Private Cloud bookings indicates robust demand and successful market penetration, which can lead to sustained revenue increases and competitive advantage in cloud services.

Negative Factors

Declining Revenue

The decline in revenue across both Private and Public Cloud segments reflects challenges in maintaining market share and pricing power, which could pressure long-term profitability.

High Leverage

High leverage and negative equity indicate financial instability, limiting Rackspace's ability to invest in growth initiatives and increasing vulnerability to economic downturns.

Negative Profitability Margins

Negative profitability margins highlight operational inefficiencies and high costs, which could hinder Rackspace's ability to generate sustainable profits and invest in future growth.

Rackspace Technology Business Overview & Revenue Model

Company Description

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. Its Apps & Cross Platform segment includes managed applications; managed security services in the areas of security threat assessment and prevention, threat detection and response, rapid remediation, governance, and risk and compliance assistance across multiple cloud platforms, as well as privacy and data protection services, including detailed access restrictions and reporting; data services; and professional services related to designing and implementing application, security, and data services. Rackspace Technology, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

How the Company Makes Money

Rackspace Technology makes money primarily through its suite of cloud management and professional services. The company generates revenue by offering subscription-based managed services, wherein clients pay for continuous support and management of their cloud environments. Additional revenue streams include consulting services for cloud strategy and implementation, as well as project-based engagements for cloud migrations and optimizations. Rackspace's partnerships with leading cloud providers like Amazon Web Services, Microsoft Azure, and Google Cloud also enhance its service offerings, allowing it to leverage these platforms to provide tailored solutions to its clients. Furthermore, Rackspace may earn revenue from reselling cloud infrastructure services and through its proprietary tools that help automate and optimize cloud operations.

Rackspace Technology Financial Statement Overview

Summary

Rackspace Technology faces significant financial challenges with declining revenues, negative profitability margins, and high leverage. Despite some positive cash flow generation, the overall financial health is concerning due to high debt levels and negative equity.

Income Statement

Rackspace Technology's income statement reveals significant challenges. The company has experienced declining revenue growth, with a TTM (Trailing-Twelve-Months) revenue decrease of 6.86%. Profitability metrics are concerning, with negative net profit and EBIT margins, indicating operational inefficiencies and high costs relative to revenue. The gross profit margin has also decreased over time, reflecting pressure on core operations.

Balance Sheet

The balance sheet shows a precarious financial position, with negative stockholders' equity and a high debt-to-equity ratio of -2.97 in the TTM period. This indicates significant leverage and financial risk. The return on equity is positive in the TTM period but is primarily due to negative equity, which is not sustainable. The equity ratio is negative, highlighting the company's reliance on debt financing.

Cash Flow

Cash flow analysis shows some improvement, with positive operating cash flow and a free cash flow growth rate of 4.08% in the TTM period. However, the operating cash flow to net income ratio is low, indicating challenges in converting earnings into cash. The free cash flow to net income ratio is positive, suggesting some ability to generate cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.69B	2.74B	2.96B	3.12B	3.01B	2.71B
Gross Profit	525.30M	533.40M	648.60M	856.90M	936.80M	984.40M
EBITDA	93.50M	-362.90M	-149.90M	-248.20M	421.40M	479.10M
Net Income	-368.60M	-858.20M	-837.80M	-804.80M	-218.30M	-245.80M
Balance Sheet
Total Assets	2.89B	3.05B	4.10B	5.47B	6.33B	6.38B
Cash, Cash Equivalents and Short-Term Investments	103.90M	144.00M	196.80M	228.40M	272.80M	104.70M
Total Debt	476.40M	3.28B	3.38B	3.90B	4.03B	3.99B
Total Liabilities	4.01B	4.06B	4.25B	4.84B	5.00B	4.99B
Stockholders Equity	-1.12B	-1.00B	-154.50M	629.50M	1.33B	1.38B
Cash Flow
Free Cash Flow	53.60M	-71.20M	278.00M	178.90M	262.40M	200.00K
Operating Cash Flow	127.10M	39.90M	374.90M	259.30M	370.80M	116.70M
Investing Cash Flow	-67.00M	-86.60M	-96.00M	-97.90M	-69.00M	-128.40M
Financing Cash Flow	-149.10M	-3.00M	-312.80M	-187.00M	-132.20M	29.90M

Rackspace Technology Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXT, the sentiment is Positive. The current price of 1.52 is above the 20-day moving average (MA) of 1.39, above the 50-day MA of 1.32, and below the 200-day MA of 1.73, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 60.77 is Neutral, neither overbought nor oversold. The STOCH value of 75.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RXT.

Rackspace Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YEXT	68 Neutral	1.07B	-69.35	4.88%	―	13.51%	―
CCSI	66 Neutral	559.06M	7.10	-112.54%	―	-1.23%	-11.22%
TENB	63 Neutral	3.62B	-79.83	-12.83%	―	11.41%	33.76%
BAND	62 Neutral	528.37M	-51.15	-2.60%	―	14.51%	58.41%
RXT	48 Neutral	$344.68M	―	81.52%	―	-4.76%	56.32%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Rackspace Technology Corporate Events

Rackspace Technology Appoints Gajen Kandiah as New CEO

On September 2, 2025, Rackspace Technology announced the appointment of Gajen Kandiah as the new CEO, effective September 3, 2025, succeeding Amar Maletira. Under Kandiah’s leadership, Rackspace aims to advance its AI-first multicloud strategy, focusing on delivering secure and governed multicloud solutions. Kandiah’s extensive experience in services, infrastructure, software, and AI aligns with Rackspace’s strategic goals to enhance customer outcomes and drive innovation in cloud management and private AI.

Shashank Samant Resigns from Rackspace Board

On August 20, 2025, Shashank Samant resigned from the Board of Directors of Rackspace Technology, with no disputes influencing his decision. Following his resignation, the Board plans to reduce its size from ten to nine members.

Rackspace Technology Holds Annual Stockholder Meeting

On June 20, 2025, Rackspace Technology held its annual meeting of stockholders, where 85.72% of shares were represented. During the meeting, stockholders elected four directors to the board, ratified KPMG LLP as the independent accounting firm for 2025, and approved executive compensation in an advisory vote.