Bullish indicating open at $55-$60, IPO prices at $37
Rackspace Technology Inc (NASDAQ:RXT) stock has hit a 52-week low, dropping to $1.18, as the company faces a tumultuous period marked by investor skepticism and broader market headwinds. With a market capitalization of $282.5 million and a concerning gross profit margin of 20.2%, the company’s financial health score on InvestingPro is rated as WEAK. This latest price level reflects a significant downturn from previous valuations, with the stock experiencing a stark 1-year change, plummeting by -44.34%. The decline to this year’s low underscores the challenges RXT has encountered in maintaining its market position amidst competitive pressures and evolving industry dynamics. With revenue declining by 6.1% and a concerning current ratio of 0.79, investors are closely monitoring the company’s strategic initiatives to rebound from this low point and recapture value in the coming quarters. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, though investors should note that analysts don’t expect profitability this year.
In other recent news, Rackspace Technology Inc. reported its Q1 2025 earnings, showcasing a mixed financial performance. The company posted a non-GAAP loss per share of $0.06, which was better than the forecasted loss of $0.0762. Revenue reached $665 million, exceeding the forecast of $658.68 million, marking its 11th consecutive quarter of meeting or surpassing guidance. RBC Capital Markets adjusted its outlook on Rackspace, reducing the price target from $3.00 to $2.00, while maintaining a Sector Perform rating. The adjustment follows Rackspace’s earnings report, which showed the company surpassing expectations for both revenue and earnings. RBC Capital noted Rackspace’s ongoing turnaround momentum and revised its fiscal year 2025 revenue, adjusted EBITDA, and adjusted EPS estimates. Rackspace’s strategic pivot towards a services-led business model is reflected in its Q1 results, with an 83% increase in non-GAAP operating profit to $26 million. The company’s total bookings for the quarter increased by 9% year-over-year, indicating a positive trend in its business operations.
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