Rackspace Technology Inc (NASDAQ:RXT) stock has reached a new 52-week high, touching $3.19 as the market responded positively to the company's recent performance and strategic initiatives. This milestone reflects a significant turnaround for the cloud services provider, which has seen its stock price surge by an impressive 93.24% over the past year. Investors have shown increased confidence in Rackspace's growth trajectory and market positioning, contributing to the stock's robust year-over-year gains and its peak at this year's high watermark.
In other recent news, Rackspace Technology Inc. has consistently exceeded revenue, profit, and earnings per share (EPS) guidance for nine consecutive quarters. The company's third quarter of 2024 results showcased a GAAP revenue of $676 million and a non-GAAP operating profit of $34 million. Private Cloud services, with a significant healthcare provider migration, showed potential for growth, expecting a 30% year-over-year revenue increase in fiscal 2024. BMO Capital Markets maintained its Market Perform rating on Rackspace shares, raising the price target from $2.50 to $3.50, following the company's recent performance. The firm's analysis indicates that Rackspace's bookings growth, particularly in the Public Cloud division, could lead to a meaningful top-line turnaround if sustained over multiple quarters. Looking ahead, Rackspace anticipates Q4 GAAP revenue to be between $668 million and $680 million, and non-GAAP operating profit to be between $34 million and $36 million. The company also projects significant growth in the healthcare sector, with potential high double-digit growth in fiscal 2025. These recent developments highlight Rackspace's ongoing success and future potential.
InvestingPro Insights
Rackspace Technology's recent stock performance aligns with several key metrics and insights from InvestingPro. The company has demonstrated a strong return over the last year, with InvestingPro data showing a remarkable 120% price total return over the past 12 months. This surge is further evidenced by the stock's 40.89% price total return over the last six months, indicating sustained momentum.
Despite these positive price movements, InvestingPro Tips highlight that Rackspace suffers from weak gross profit margins, which is reflected in the company's gross profit margin of 20.83% for the last twelve months as of Q2 2024. Additionally, analysts anticipate a sales decline in the current year, with revenue growth showing a negative 8.18% for the same period.
It's worth noting that while the stock price has shown significant appreciation, the company is not currently profitable, as indicated by its negative operating income of $98.7 million over the last twelve months. This aligns with another InvestingPro Tip suggesting that analysts do not anticipate the company will be profitable this year.
For investors seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for Rackspace Technology, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.