Rackspace Technology (RXT)
NASDAQ:RXT
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Rackspace Technology
(NASDAQ:RXT)
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Rating:47Neutral
Price Target:
$0.96
▼(-0.62% Downside)
Action:ReiteratedDate:04/01/26
The score is held down primarily by weak fundamentals (declining revenue, ongoing losses, low gross margin) and elevated balance-sheet risk from deeply negative equity, despite improving cash generation. Technicals are also bearish with the stock below key moving averages, though oversold signals provide limited support. The latest earnings call improves the outlook via guidance for profitability and free-cash-flow expansion, but near-term revenue/margin headwinds prevent a higher score.
Positive Factors
Public cloud services growth
Sustained high-growth in public-cloud managed services signals durable demand for higher-value, recurring offerings. This shifts revenue mix toward scalable managed services across hyperscalers, supporting long-term customer stickiness, predictable recurring cash flow and a pathway to improving margins over multiple quarters.
Negative Factors
Negative shareholders' equity
Deeply negative equity is a persistent solvency and capital-structure risk that constrains strategic options. It impairs the company’s cushion for shocks, complicates access to equity financing, and makes leverage harder to assess, raising multi-quarter refinancing and flexibility concerns.
Read all positive and negative factors
Positive Factors
Negative Factors
Public cloud services growth
Sustained high-growth in public-cloud managed services signals durable demand for higher-value, recurring offerings. This shifts revenue mix toward scalable managed services across hyperscalers, supporting long-term customer stickiness, predictable recurring cash flow and a pathway to improving margins over multiple quarters.
Read all positive factors
Rackspace Technology (RXT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$239.95M
Dividend YieldN/A
Average Volume (3M)1.02M
Price to Earnings (P/E)―
Beta (1Y)2.49
Revenue Growth-2.98%
EPS Growth69.09%
CountryUS
Employees5,100
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.01
Shares Outstanding246,914,400
10 Day Avg. Volume1,190,569
30 Day Avg. Volume1,022,900
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)-0.19
Price to Sales (P/S)0.09
P/FCF Ratio2.56
Enterprise Value/Market Cap14.15
Enterprise Value/Revenue1.26
Enterprise Value/Gross Profit6.71
Enterprise Value/Ebitda17.21
Forecast
1Y Price Target
$2.17Price Target Upside123.71% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)-0.03
Revenue Forecast (FY)$2.72B
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 man...
How the Company Makes Money
Rackspace Technology primarily makes money by selling services that help customers adopt, manage, and optimize cloud and hybrid IT environments.
1) Services revenue (projects / professional services): The company generates revenue from time-and-m...
Rackspace Technology Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 12, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive strategic pivot and operational progress with several key positives: Q4 revenue beat, strong public cloud services growth, improving operating profitability and healthy cash generation. Management outlined a clear platform-engineering strategy, meaningful partnerships (notably Palantir) and a roadmap to scale high-value enterprise AI and private cloud engagements. Offsetting this optimism are short-term challenges: a private cloud Q4 revenue miss due to a delayed health care ramp, YoY gross margin declines driven by mix and lower private cloud revenue, and near-term revenue cadence variability driven by large deal timing and a planned transition of a low-margin government contract. Overall, the positive execution, improved margins sequentially, strong guidance for operating profit expansion and strategic momentum slightly outweigh the operational and margin headwinds, supporting a favorable outlook.Positive Updates
Beat Guidance and Strong Q4 Revenue Performance
Total company GAAP revenue of $683 million in Q4 exceeded guidance across most metrics; public cloud revenue of $442 million was above guided range and drove outperformance.
Negative Updates
Private Cloud Q4 Revenue Miss and Ramp Delay
Private cloud revenue was $241 million in Q4, below the company's guided range due to a recently signed large health care deal ramping more slowly than expected; full-year private cloud revenue was $990 million, down 6% year-over-year.
Read all updates
Q4-2025 Updates
Positive
Negative
Beat Guidance and Strong Q4 Revenue Performance
Total company GAAP revenue of $683 million in Q4 exceeded guidance across most metrics; public cloud revenue of $442 million was above guided range and drove outperformance.
Read all positive updates
Company Guidance
Rackspace said it will shift to an annual guidance framework for 2026 and expects full‑year GAAP revenue of $2.6–$2.7 billion (down ~1% YoY at the midpoint); segment guidance targets private cloud revenue of $1.025–$1.075 billion (up ~6% YoY at midpoint) and public cloud revenue of $1.575–$1.625 billion (down ~6% YoY at midpoint, primarily due to a planned transition of a low‑margin government contract), with public‑cloud services revenue expected to grow mid‑ to high‑teens YoY excluding that contract; profitability and cash metrics include total non‑GAAP operating profit of $160–$170 million (≈+31% at midpoint), adjusted EBITDA of $305–$315 million (≈+12% at midpoint), non‑GAAP loss per share of $0.15–$0.20, a non‑GAAP tax rate of 26%, non‑GAAP other expenses of $220–$230 million, a non‑GAAP share count of 250–260 million, and expected free cash flow of $90–$110 million.Rackspace Technology Financial Statement Overview
Summary
Income Statement
28
Negative
Balance Sheet
18
Very Negative
Cash Flow
55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.69B | 2.74B | 2.96B | 3.12B | 3.01B |
| Gross Profit | 506.40M | 533.40M | 648.60M | 856.90M | 936.80M |
| EBITDA | 216.90M | -420.50M | -149.90M | -241.70M | 446.70M |
| Net Income | -225.80M | -858.20M | -837.80M | -804.80M | -218.30M |
Balance Sheet | |||||
| Total Assets | 2.80B | 3.05B | 4.10B | 5.46B | 6.33B |
| Cash, Cash Equivalents and Short-Term Investments | 105.80M | 144.00M | 196.80M | 228.40M | 272.80M |
| Total Debt | 3.28B | 3.28B | 3.38B | 3.85B | 3.97B |
| Total Liabilities | 4.02B | 4.06B | 4.25B | 4.83B | 5.00B |
| Stockholders Equity | -1.22B | -1.00B | -154.50M | 629.50M | 1.33B |
Cash Flow | |||||
| Free Cash Flow | 90.60M | -71.20M | 278.00M | 178.90M | 262.40M |
| Operating Cash Flow | 151.40M | 39.90M | 374.90M | 259.30M | 370.80M |
| Investing Cash Flow | -58.40M | -86.60M | -96.00M | -97.90M | -69.00M |
| Financing Cash Flow | -134.60M | -3.00M | -312.80M | -187.00M | -132.20M |
Rackspace Technology Technical Analysis
Negative
0.97
Price Trends
1.27
Negative
1.15
Negative
1.26
Negative
Market Momentum
-0.18
Positive
36.27
Neutral
12.62
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 0.97 is below the 20-day moving average (MA) of 1.39, below the 50-day MA of 1.27, and below the 200-day MA of 1.26, indicating a bearish trend. The MACD of -0.18 indicates Positive momentum. The RSI at 36.27 is Neutral, neither overbought nor oversold. The STOCH value of 12.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RXT.
Rackspace Technology Risk Analysis
Rackspace Technology disclosed 57 risk factors in its most recent earnings report. Rackspace Technology reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rackspace Technology Peers Comparison
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0.97
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.