Rackspace Hosting Inc. (RAX) Rating Increased to Buy at Zacks Investment Research
Rackspace Hosting Inc. (NYSE:RAX) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued to investors on Tuesday. The brokerage currently has a $36.00 price objective on the hosting company’s stock. Zacks Investment Research’s target price suggests a potential upside of 13.28% from the company’s previous close.
According to Zacks, “As the world’s leader and specialist in hosting, Rackspace Hosting is changing the way businesses worldwide buy IT. Rackspace delivers computing-as-a-service, integrating the industry’s best technologies into a flexible service offering, making computing more reliable and affordable. A trusted partner to companies of all sizes, Rackspace enables IT departments to be more effective. Rackspace is distinguished by its award-winning Fanatical Support, furthering the company’s mission to be one of the world’s greatest service companies. Rackspace featured in the top 30 of both the Sunday Times 100 Best companies to work for list and the Financial Times Great Place to Work Awards, 2008. Rackspace’s portfolio of hosted services includes managed hosting, email hosting and cloud hosting “
Several other analysts also recently issued reports on RAX. Vetr raised shares of Rackspace Hosting from a “buy” rating to a “strong-buy” rating and set a $24.00 price objective for the company in a report on Monday, June 27th. FBN Securities upped their price objective on shares of Rackspace Hosting from $21.00 to $26.00 and gave the stock a “sector perform” rating in a report on Tuesday, August 9th. RBC Capital Markets reaffirmed an “outperform” rating and set a $33.00 price objective (up from $26.00) on shares of Rackspace Hosting in a report on Thursday, August 11th. SunTrust Banks Inc. began coverage on shares of Rackspace Hosting in a report on Thursday, July 21st. They set a “neutral” rating and a $25.00 price objective for the company. Finally, Wells Fargo & Co. downgraded shares of Rackspace Hosting from an “outperform” rating to a “market perform” rating in a report on Monday, August 29th. Two research analysts have rated the stock with a sell rating, seventeen have given a hold rating and six have assigned a buy rating to the stock. The company currently has an average rating of “Hold” and an average target price of $29.03.
Shares of Rackspace Hosting (NYSE:RAX) remained flat at $31.78 on Tuesday. The company’s stock had a trading volume of 370,976 shares. Rackspace Hosting has a 52 week low of $15.05 and a 52 week high of $32.14. The firm has a market capitalization of $4.00 billion, a price-to-earnings ratio of 27.98 and a beta of 1.66. The firm’s 50 day moving average price is $31.18 and its 200-day moving average price is $25.63.
Rackspace Hosting (NYSE:RAX) last posted its earnings results on Monday, August 8th. The hosting company reported $0.38 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $0.22 by $0.16. The firm earned $489.40 million during the quarter, compared to analysts’ expectations of $521.07 million. Rackspace Hosting had a net margin of 7.39% and a return on equity of 16.80%. The company’s revenue was up 7.0% compared to the same quarter last year. During the same period in the previous year, the company earned $0.20 earnings per share. Equities analysts expect that Rackspace Hosting will post $1.07 EPS for the current year.
Hedge funds and other institutional investors have recently modified their holdings of the stock. A.R.T. Advisors LLC raised its position in shares of Rackspace Hosting by 221.7% in the first quarter. A.R.T. Advisors LLC now owns 283,519 shares of the hosting company’s stock valued at $6,121,000 after buying an additional 195,400 shares during the period. HBK Investments L P raised its position in shares of Rackspace Hosting by 28.7% in the first quarter. HBK Investments L P now owns 754,942 shares of the hosting company’s stock valued at $16,299,000 after buying an additional 168,491 shares during the period. Geode Capital Management LLC raised its position in shares of Rackspace Hosting by 6.0% in the first quarter. Geode Capital Management LLC now owns 712,067 shares of the hosting company’s stock valued at $15,372,000 after buying an additional 40,219 shares during the period. Riverhead Capital Management LLC raised its position in shares of Rackspace Hosting by 180.5% in the first quarter. Riverhead Capital Management LLC now owns 629,938 shares of the hosting company’s stock valued at $13,600,000 after buying an additional 405,378 shares during the period. Finally, UBS Group AG raised its position in shares of Rackspace Hosting by 2.6% in the first quarter. UBS Group AG now owns 105,394 shares of the hosting company’s stock valued at $2,276,000 after buying an additional 2,676 shares during the period. 83.59% of the stock is currently owned by institutional investors.
Rackspace Hosting Company Profile
Rackspace Hosting, Inc (Rackspace) operates in the managed cloud segment of the business information technology (IT) market. The Company offers a portfolio of integrated IT solutions for common business needs. The Company offers services for certain applications, including e-commerce and Web content management sites, business-productivity applications, such as e-mail and collaboration, and data stores.
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