Rackspace Technology, Inc. (RXT) AI Stock Analysis

Rackspace Technology operates globally as a multi-cloud technology services provider across two primary segments: Multicloud Services and Apps & Cross Platform. Multicloud Services focuses on delivering managed services across public and private cloud environments, assisting customers with infrastructure optimization, architecture design, and cloud-native application development. The Apps & Cross Platform segment delivers managed application management, data protection, compliance governance, and comprehensive managed security services such as threat assessment and incident response. Headquartered in San Antonio, Texas, the company helps organizations design, secure, and operate multi-cloud architectures.

Between FY2021 and FY2025, annual revenue fell from $3.01B to $2.69B, reflecting a 5-year revenue CAGR of -0.2%. Gross margins narrowed over this period from 31.1% in FY2021 to 13.4% in FY2025, while operating margins improved from -33.2% in FY2024 to -2.5% in FY2025. Annual net income was -$225.8M in FY2025, recovering from a -$858.2M loss in FY2024. For the trailing twelve months ended June 30, 2026, revenue stood at $2.70B with an operating margin of -2.1% and diluted EPS of -$0.65. Revenue grew 0.6% year-over-year in the latest quarter.

As of June 30, 2026, Rackspace Technology held $110.6M in cash and short-term investments against $3.30B in total debt, resulting in net debt of $3.19B. The company closed the period with a current ratio of 0.76 and shareholders' equity of -$1.28B. In FY2025, operating cash flow reached $151.4M and free cash flow stood at $90.6M. Capital expenditures totaled $60.8M for FY2025, while share buybacks amounted to $1.2M. Over the past five years, the company's share count increased 18.9%.

Rackspace Technology trades at a forward P/E of 13.1x, below the 18.8x median of its US-listed Technology peers. Its enterprise value to revenue multiple sits at 1.6x, and its EV to EBITDA is 13.5x compared to the peer median of 16.6x. The stock trades at a price-to-sales ratio of 0.3x versus the peer group median of 2.8x. Over the past year, the stock returned 92.2%, outperforming the S&P 500 (SPY) return of 16.8%, although its 5-year return sits at -81.1% compared to an 83.0% gain for the benchmark index.

Wall Street coverage includes 3 Hold ratings, with 0 Buy and 0 Sell recommendations. The consensus mean price target is $4.77, representing a 68.7% premium over the last close of $2.83. For the fiscal year ending December 31, 2026, analysts estimate an EPS of -$0.27 on revenue of $2.50B. For the following fiscal year, 3 analysts project revenue of $2.62B and an EPS of $0.14. The company has beaten EPS expectations in 2 of the past 4 quarters, with its next earnings date scheduled for November 5, 2026.

This page is an AI-written research summary of Rackspace Technology, Inc. (RXT). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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