Rackspace Technology (RXT) AI Stock Analysis

• Market Cap: $349.47M
• Dividend Yield: N/A
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.90
• Revenue Growth: -2.98%
• EPS Growth: 69.09%
• Country: US
• Employees: 5,100
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.05
• Shares Outstanding: 239,360,670
• 10 Day Avg. Volume: 923,573
• 30 Day Avg. Volume: 1,028,449
• 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: 0.00
• Enterprise Value/Revenue: 0.00
• Enterprise Value/Gross Profit: 0.00
• Enterprise Value/Ebitda: 0.00
• 1Y Price Target: $1.40
• Price Target Upside: 12.90% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -0.21
• Revenue Forecast (FY): $2.67B

• Rating: 45 Neutral
• Price Target: $1.00 ▼(-19.35% Downside)

Rackspace Technology's overall stock score is primarily impacted by its challenging financial performance, with declining revenues and negative profitability margins. The technical analysis also indicates bearish momentum. Despite some positive developments in the earnings call, such as growth in Private Cloud bookings and AI initiatives, the overall outlook remains cautious due to ongoing financial and operational challenges.

Positive Factors

Strategic Partnerships

Strategic alliances enhance Rackspace's service portfolio and market reach, particularly in AI, positioning it for long-term growth in emerging tech sectors.

Private Cloud Growth

Strong growth in Private Cloud bookings indicates robust demand and successful penetration in key industries, supporting future revenue stability.

Positive Free Cash Flow Outlook

Anticipated positive free cash flow enhances financial flexibility, enabling investment in growth initiatives and debt reduction, improving long-term stability.

Negative Factors

Revenue Decline

Declining revenue in key segments highlights challenges in maintaining market share, potentially impacting long-term growth and competitive positioning.

High Leverage

High leverage and negative equity pose significant financial risks, limiting the company's ability to invest in growth and weather economic downturns.

Negative Profitability Margins

Negative profitability margins indicate operational inefficiencies and high costs, which could hinder the company's ability to achieve sustainable 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 generates revenue primarily through its subscription-based model, charging customers for managed cloud services and solutions. Key revenue streams include fees for cloud infrastructure, managed services, consulting, and support services. The company has established strategic partnerships with major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which enhance its service offerings and enable cross-selling opportunities. Additionally, Rackspace benefits from long-term contracts with its clients, providing a stable revenue base, and it focuses on upselling value-added services to existing customers to drive growth.

Rackspace Technology Financial Statement Overview

Summary

Rackspace Technology faces significant financial challenges, with declining revenues, negative profitability margins, and a highly leveraged balance sheet. While there is some improvement in cash flow generation, the overall financial health remains precarious, requiring strategic adjustments to improve stability and profitability.

Income Statement

Rackspace Technology's income statement shows declining revenue with a negative growth rate of -17.1% in TTM, indicating a challenging market environment. The gross profit margin has decreased to 19.26%, and the net profit margin is negative at -9.27%, reflecting ongoing profitability issues. EBIT and EBITDA margins are also negative, highlighting operational inefficiencies.

Balance Sheet

The balance sheet reveals a concerning financial structure with negative stockholders' equity and a high debt-to-equity ratio of -0.39 in TTM, indicating significant leverage and potential financial instability. Return on equity is positive at 22.73%, but this is due to negative equity, which distorts the metric. The equity ratio is negative, further emphasizing financial risk.

Cash Flow

Cash flow analysis shows some positive trends, with a free cash flow growth rate of 28.73% in TTM. The operating cash flow to net income ratio is 0.19, indicating some ability to generate cash from operations despite net losses. However, the free cash flow to net income ratio of 0.47 suggests limited cash flow relative to 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	517.70M	533.40M	648.60M	856.90M	936.80M	984.40M
EBITDA	126.00M	-362.90M	-149.90M	-248.20M	421.40M	479.10M
Net Income	-249.10M	-858.20M	-837.80M	-804.80M	-218.30M	-245.80M
Balance Sheet
Total Assets	2.85B	3.05B	4.10B	5.47B	6.33B	6.38B
Cash, Cash Equivalents and Short-Term Investments	99.50M	144.00M	196.80M	228.40M	272.80M	104.70M
Total Debt	462.40M	3.28B	3.38B	3.90B	4.03B	3.99B
Total Liabilities	4.03B	4.06B	4.25B	4.84B	5.00B	4.99B
Stockholders Equity	-1.19B	-1.00B	-154.50M	629.50M	1.33B	1.38B
Cash Flow
Free Cash Flow	69.00M	-71.20M	278.00M	178.90M	262.40M	200.00K
Operating Cash Flow	146.00M	39.90M	374.90M	259.30M	370.80M	116.70M
Investing Cash Flow	-73.10M	-86.60M	-96.00M	-97.90M	-69.00M	-128.40M
Financing Cash Flow	-130.60M	-3.00M	-312.80M	-187.00M	-132.20M	29.90M

Rackspace Technology Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RXT, the sentiment is Negative. The current price of 1.24 is below the 20-day moving average (MA) of 1.54, below the 50-day MA of 1.47, and below the 200-day MA of 1.59, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 35.68 is Neutral, neither overbought nor oversold. The STOCH value of 9.60 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXT.

Rackspace Technology Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TUYA	64 Neutral	$1.36B	44.63	2.89%	4.81%	22.46%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BASE	60 Neutral	―	―	―	―	10.98%	11.62%
ZENV	55 Neutral	$69.74M	-3.40	-14.38%	―	9.16%	20.13%
BLZE	47 Neutral	$527.71M	―	-55.03%	―	15.73%	40.14%
RXT	45 Neutral	$349.47M	-1.15	―	―	-2.98%	69.09%

Rackspace Technology Corporate Events

Rackspace Technology Reports Mixed Q3 2025 Results

Rackspace Technology, Inc. is a prominent company providing comprehensive hybrid cloud and AI solutions, enabling clients to design, build, and operate cloud environments across various technology platforms.

Rackspace Technology Announces Board Member Resignation

On September 26, 2025, Rackspace Technology announced the resignation of Mr. Vikram Mahidhar from its Board of Directors, effective September 30, 2025, following his departure from Apollo Global Management. His resignation was not due to any disagreements with the company. Additionally, on September 24, 2025, Mr. Srinivas Koushik resigned from his position as President, Technology, Sustainability, and Artificial Intelligence. He will receive a pro-rata bonus for 2025 in exchange for transition and advisory services.

The most recent analyst rating on (RXT) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on Rackspace Technology stock, see the RXT Stock Forecast page.

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.

The most recent analyst rating on (RXT) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Rackspace Technology stock, see the RXT Stock Forecast page.

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.

The most recent analyst rating on (RXT) stock is a Hold with a $1.00 price target. To see the full list of analyst forecasts on Rackspace Technology stock, see the RXT Stock Forecast page.

Rackspace Technology’s Earnings Call: Mixed Results and Strategic Wins

Rackspace Technology’s recent earnings call painted a mixed picture, with strong performance in bookings and AI initiatives, but challenges in revenue and cash flow. The company showed notable strategic wins in both Private and Public Cloud segments, yet faced difficulties with declining overall revenue and free cash flow, particularly in the Private Cloud sector.

Rackspace Technology Reports Q2 2025 Financial Results

Rackspace Technology, Inc. is a prominent company specializing in end-to-end hybrid cloud and AI solutions, offering services to design, build, and operate cloud environments across various technology platforms. In its second quarter of 2025, Rackspace Technology reported a revenue of $666 million, marking a 3% decline compared to the previous year. Despite the revenue drop, the company exceeded its midpoint guidance for revenue and operating profit, and maintained its earnings per share within the guided range. Key financial highlights include a 16% growth in bookings and a 34% increase in operating profit year-over-year. The company’s private cloud revenue stood at $250 million, down 4%, while public cloud revenue was $417 million, down 2% from the previous year. Rackspace Technology also reported a net loss of $55 million, contrasting with a net income of $25 million in the same quarter last year. Looking ahead, Rackspace Technology remains optimistic about its strategic execution and aims to continue its turnaround efforts, with guidance for the third quarter of 2025 projecting revenue between $660 million and $674 million.