Rackspace Technology, Inc. (RXT)
NASDAQ:RXT
Want to see RXT full AI Analyst Report?
Top Page
Rackspace Technology
(NASDAQ:RXT)
Select Model
Select Model
Rating:59Neutral
Price Target:
$4.00
▲(172.11% Upside)
Action:Reiterated
Date:05/21/26
The score is held back mainly by balance-sheet risk (negative equity) and still-incomplete profitability recovery despite improved revenue/EBITDA and positive free cash flow. Technicals are supportive with strong trend alignment and positive MACD, while valuation appears inexpensive on P/E. Earnings call guidance is a net positive on profit/FCF expansion but includes near-term revenue and margin headwinds.
Positive Factors
Recurring Managed Services Model
Rackspace's core business is recurring managed services and multi-year professional engagements across multi-cloud and hybrid environments. That service-fee model yields predictable recurring revenue, higher client stickiness, and lower capital intensity versus hyperscalers, supporting durable revenue visibility and margin recovery potential.
Negative Factors
Weak Balance Sheet (Negative Equity)
Negative shareholders' equity constrains financial flexibility and raises refinancing and covenant risks. Even with lower total debt versus prior years, the equity deficit limits capacity for acquisitions, raises cost of capital, and makes the firm more vulnerable to shocks or slower cash-flow recovery over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Managed Services Model
Rackspace's core business is recurring managed services and multi-year professional engagements across multi-cloud and hybrid environments. That service-fee model yields predictable recurring revenue, higher client stickiness, and lower capital intensity versus hyperscalers, supporting durable revenue visibility and margin recovery potential.
Read all positive factors
Rackspace Technology (RXT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$996.89M
Dividend YieldN/A
Average Volume (3M)27.15M
Price to Earnings (P/E)7.3
Beta (1Y)3.52
Revenue Growth-0.49%
EPS Growth52.70%
CountryUS
Employees5,100
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)-0.61
Shares Outstanding249,222,500
10 Day Avg. Volume66,863,512
30 Day Avg. Volume27,148,725
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 Cap4.18
Enterprise Value/Revenue1.54
Enterprise Value/Gross Profit12.39
Enterprise Value/Ebitda13.51
Forecast
1Y Price Target
$3.17Price Target Upside115.42% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)-0.16
Revenue Forecast (FY)$2.65B
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 (rather than owning a hyperscale cloud). Its revenue model is largely service-fee based and is generally driven by the following streams: (1) Managed Services (recurring): ongoing oper...
Rackspace Technology Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Aug 11, 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
32
Negative
Balance Sheet
18
Very Negative
Cash Flow
44
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.70B | 2.69B | 2.74B | 2.96B | 3.12B | 3.01B |
| Gross Profit | 336.50M | 359.50M | 533.40M | 648.60M | 856.90M | 936.80M |
| EBITDA | 308.40M | 294.20M | -420.50M | -149.90M | -241.70M | 446.70M |
| Net Income | -146.00M | -225.80M | -858.20M | -837.80M | -804.80M | -218.30M |
Balance Sheet | ||||||
| Total Assets | 2.77B | 2.80B | 3.05B | 4.10B | 5.46B | 6.33B |
| Cash, Cash Equivalents and Short-Term Investments | 93.60M | 105.80M | 144.00M | 196.80M | 228.40M | 272.80M |
| Total Debt | 3.23B | 3.28B | 3.28B | 3.38B | 3.85B | 3.97B |
| Total Liabilities | 3.98B | 4.02B | 4.06B | 4.25B | 4.83B | 5.00B |
| Stockholders Equity | -1.22B | -1.22B | -1.00B | -154.50M | 629.50M | 1.33B |
Cash Flow | ||||||
| Free Cash Flow | 76.90M | 90.60M | -71.20M | 278.00M | 178.90M | 262.40M |
| Operating Cash Flow | 143.90M | 151.40M | 39.90M | 374.90M | 259.30M | 370.80M |
| Investing Cash Flow | -61.10M | -58.40M | -86.60M | -96.00M | -97.90M | -69.00M |
| Financing Cash Flow | -118.10M | -134.60M | -3.00M | -312.80M | -187.00M | -132.20M |
Rackspace Technology Technical Analysis
Positive
1.47
Price Trends
2.32
Positive
1.73
Positive
1.51
Positive
Market Momentum
0.80
Positive
53.82
Neutral
11.54
Positive
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 1.47 is below the 20-day moving average (MA) of 3.77, below the 50-day MA of 2.32, and below the 200-day MA of 1.51, indicating a bullish trend. The MACD of 0.80 indicates Positive momentum. The RSI at 53.82 is Neutral, neither overbought nor oversold. The STOCH value of 11.54 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RXT.
Rackspace Technology Risk Analysis
Rackspace Technology disclosed 58 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
UnderperformOutperform
Sector (61)
RXT
Rackspace Technology
4.15
3.04
273.87%
TUYA
Tuya
2.07
-0.24
-10.31%
CISO
Cerberus Cyber Sentinel Corp
0.31
-0.93
-75.16%
BLZE
Backblaze
7.67
2.04
36.23%
Rackspace Technology Corporate Events
Executive/Board Changes
Rackspace Technology Announces Board Resignation, Governance Remains Stable
Neutral
Apr 3, 2026
On March 31, 2026, Rackspace Technology, Inc. announced that Ms. Betsy Atkins resigned from its Board of Directors, ending her tenure on the company’s governing body. The company stated that her resignation was not due to any dispute or disa...
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.