Rackspace Technology (RXT) AI Stock Analysis

• Market Cap: $289.63M
• Dividend Yield: N/A
• Average Volume (3M): 868.50K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.61
• Revenue Growth: -4.76%
• EPS Growth: 56.32%
• Country: US
• Employees: 5,100
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Infrastructure
• EPS (TTM): -0.06
• Shares Outstanding: 239,360,670
• 10 Day Avg. Volume: 866,795
• 30 Day Avg. Volume: 868,500
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 12.16
• Enterprise Value/Revenue: 1.31
• Enterprise Value/Gross Profit: 6.70
• Enterprise Value/Ebitda: 37.66
• 1Y Price Target: $1.85
• Price Target Upside: 52.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 40 Neutral
• Price Target: $1.00 ▼(-17.36% Downside)

Rackspace Technology's stock score is primarily impacted by its weak financial performance, characterized by declining revenues and high leverage. Technical analysis and valuation also present challenges, with bearish momentum and a negative P/E ratio. While the earnings call showed some positive developments, they are not enough to offset the significant financial and operational risks.

Positive Factors

Bookings

Bookings grew 2% sequentially and 16% year-over-year, primarily driven by Private Cloud deal wins.

Capital

Rackspace does not need to raise additional capital to fund its business plan for the next 12-24 months.

Guidance

Rackspace reported strong bookings and issued positive guidance for the second quarter.

Negative Factors

Contract Adjustments

The shift to larger contracts will take more time for Rackspace to adjust to, affecting its performance rating.

Public Cloud Revenues

Public Cloud revenues declined by 2.2% year-over-year, compared to 1.3% in the March quarter.

Turnaround

There is ongoing pressure to revenue as Rackspace is in the midst of a long turnaround journey under new leadership.

Rackspace Technology Business Overview & Revenue Model

Company Description

Rackspace Technology (RXT) is a leading provider of managed cloud computing services. The company specializes in offering comprehensive cloud management solutions across public, private, and hybrid cloud environments. With a focus on helping businesses optimize their IT infrastructure, Rackspace delivers end-to-end solutions including cloud migration, cloud security, data management, and application services. The company is particularly known for its expertise in major cloud platforms such as AWS, Microsoft Azure, and Google Cloud.

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 is facing significant financial challenges, with declining revenues, negative profitability, and a heavily leveraged balance sheet. While there are some positive signs in cash flow management, overall financial health remains weak, posing risks to long-term sustainability.

Income Statement

Rackspace Technology's income statement shows declining revenue and profitability. The TTM revenue growth rate is negative, reflecting a decrease from the previous year. The gross profit margin has also decreased over time, indicating a squeeze on profitability. EBIT and net profit margins are negative, highlighting ongoing operational challenges and losses.

Balance Sheet

The balance sheet reveals significant weaknesses, with negative stockholders' equity indicating financial distress. The debt-to-equity ratio is not applicable due to negative equity, but high total debt poses a risk. The equity ratio is negative, emphasizing financial instability and high leverage.

Cash Flow

Despite negative net income, Rackspace Technology shows some positive cash flow trends. The operating cash flow to net income ratio is positive, indicating better cash generation relative to accounting losses. Free cash flow has improved in the TTM period, although past trends show volatility.

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	3.32B	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: Negative
• Last Price: 1.21
• 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 1.21 is below the 20-day moving average (MA) of 1.29, below the 50-day MA of 1.31, and below the 200-day MA of 1.91, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 44.72 is Neutral, neither overbought nor oversold. The STOCH value of 50.33 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
YEXT	66 Neutral	$964.49M	―	-15.69%	―	8.38%	-278.88%
CCSI	65 Neutral	$486.76M	6.41	-94.58%	―	-1.23%	-11.22%
Sector *	63 Neutral	€2.31B	20.53	4.63%	2.75%	5.30%	-63.21%
BAND	62 Neutral	$429.21M	―	-2.90%	―	14.51%	58.41%
TENB	60 Neutral	$3.52B	―	-12.60%	―	11.41%	33.76%
RXT	40 Neutral	$289.63M	―	81.52%	―	-4.76%	56.32%

Rackspace Technology Corporate Events

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.

The most recent analyst rating on (RXT) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on Rackspace Technology stock, see the RXT Stock Forecast page.