Rackspace Technology (RXT) AI Stock Analysis

• Market Cap: $242.08M
• Dividend Yield: N/A
• Average Volume (3M): 1.16M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.86
• 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: 243,592,120
• 10 Day Avg. Volume: 1,033,876
• 30 Day Avg. Volume: 1,158,242
• 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: 14.53
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 6.79
• Enterprise Value/Ebitda: 21.38
• 1Y Price Target: $1.48
• Price Target Upside: 49.49% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): -0.21
• Revenue Forecast (FY): $2.67B

• Rating: 43 Neutral
• Price Target: $1.00 ▲(1.01% Upside)

Rackspace Technology's overall stock score reflects significant financial challenges, including declining revenues and negative profitability margins. Technical analysis indicates bearish momentum, with the stock trading below key moving averages and showing oversold conditions. Valuation metrics are weak, with a negative P/E ratio and no dividend yield. While the earnings call highlighted some positive developments, such as sales momentum and product innovation, these were offset by declines in private cloud revenue and profit margins.

Positive Factors

Strategic Partnerships

Strategic partnerships with major cloud providers enhance Rackspace's service offerings and cross-selling opportunities, supporting long-term growth.

Innovative Product Launches

Innovative product launches in AI and cloud security demonstrate Rackspace's commitment to evolving its offerings, potentially driving future growth.

Cash Flow Improvement

Improvement in free cash flow indicates better cash generation ability, which can support strategic investments and debt reduction over time.

Negative Factors

Declining Revenue

Declining revenue reflects a challenging market environment, which could hinder Rackspace's ability to invest in growth and maintain competitive positioning.

High Leverage

High leverage poses financial risks, limiting Rackspace's flexibility to navigate economic downturns and invest in growth opportunities.

Decreased Profit Margins

Decreased profit margins highlight operational inefficiencies, which could impact Rackspace's long-term profitability and competitive edge.

Rackspace Technology Business Overview & Revenue Model

Company Description

Rackspace Technology (RXT) is a leading provider of cloud solutions, specializing in managed cloud services and multi-cloud environments. The company caters to a diverse range of sectors, including enterprise, government, and small to medium-sized businesses. Rackspace offers a comprehensive suite of products and services, including cloud migration, managed hosting, application services, and cloud security, designed to help organizations optimize their cloud strategies and enhance operational efficiency.

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	164.50M	-420.50M	-149.90M	-241.70M	446.70M	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	5.46B	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	3.28B	3.28B	3.38B	3.85B	3.97B	3.99B
Total Liabilities	4.03B	4.06B	4.25B	4.83B	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: 0.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 0.99 is below the 20-day moving average (MA) of 1.18, below the 50-day MA of 1.37, and below the 200-day MA of 1.47, indicating a bearish trend. The MACD of -0.12 indicates Positive momentum. The RSI at 33.17 is Neutral, neither overbought nor oversold. The STOCH value of 23.51 is Neutral, 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	65 Neutral	$1.36B	28.00	4.87%	4.60%	13.36%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
BASE	60 Neutral	―	―	―	―	10.98%	11.62%
BLZE	51 Neutral	$263.11M	―	-55.03%	―	15.73%	40.14%
ZENV	49 Neutral	$69.74M	-3.40	-14.38%	―	9.16%	20.13%
RXT	43 Neutral	$242.08M	-0.92	―	―	-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.