Rackspace Hosting Inc. (NYSE:RAX) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued on Wednesday.
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 “
RAX has been the subject of several other research reports. William Blair cut Rackspace Hosting from an “outperform” rating to a “market perform” rating in a research note on Friday, August 26th. Oppenheimer Holdings Inc. reaffirmed an “outperform” rating and set a $32.00 target price (up previously from $30.00) on shares of Rackspace Hosting in a research note on Wednesday, August 10th. SunTrust Banks Inc. began coverage on Rackspace Hosting in a research note on Thursday, July 21st. They set a “neutral” rating and a $25.00 target price for the company. Vetr raised Rackspace Hosting from a “hold” rating to a “buy” rating and set a $24.00 target price for the company in a research note on Tuesday, August 2nd. Finally, Needham & Company LLC reaffirmed a “hold” rating on shares of Rackspace Hosting in a research note on Friday, August 26th. Two analysts have rated the stock with a sell rating, eighteen have assigned a hold rating and five have given a buy rating to the company. Rackspace Hosting currently has an average rating of “Hold” and a consensus price target of $29.03.
Shares of Rackspace Hosting (NYSE:RAX) opened at 31.81 on Wednesday. Rackspace Hosting has a 52 week low of $15.05 and a 52 week high of $32.14. The company has a market cap of $4.00 billion, a PE ratio of 28.00 and a beta of 1.67. The stock’s 50 day moving average price is $31.54 and its 200-day moving average price is $25.76.
Rackspace Hosting (NYSE:RAX) last released its earnings results on Monday, August 8th. The hosting company reported $0.38 EPS for the quarter, topping the consensus estimate of $0.22 by $0.16. Rackspace Hosting had a return on equity of 16.80% and a net margin of 7.39%. The business earned $489.40 million during the quarter, compared to analysts’ expectations of $521.07 million. During the same quarter last year, the firm posted $0.20 earnings per share. The firm’s revenue was up 7.0% on a year-over-year basis. Analysts expect that Rackspace Hosting will post $1.07 EPS for the current year.
Hedge funds have recently added to or reduced their stakes in the company. Advisory Services Network LLC increased its stake in Rackspace Hosting by 10.3% in the second quarter. Advisory Services Network LLC now owns 5,361 shares of the hosting company’s stock worth $112,000 after buying an additional 500 shares in the last quarter. LS Investment Advisors LLC increased its stake in Rackspace Hosting by 66.2% in the second quarter. LS Investment Advisors LLC now owns 6,426 shares of the hosting company’s stock worth $134,000 after buying an additional 2,559 shares in the last quarter. Advisors Asset Management Inc. increased its stake in Rackspace Hosting by 20.3% in the second quarter. Advisors Asset Management Inc. now owns 6,553 shares of the hosting company’s stock worth $137,000 after buying an additional 1,107 shares in the last quarter. Pacer Advisors Inc. purchased a new stake in Rackspace Hosting during the second quarter worth about $148,000. Finally, Creative Planning increased its stake in Rackspace Hosting by 24.4% in the second quarter. Creative Planning now owns 9,530 shares of the hosting company’s stock worth $199,000 after buying an additional 1,870 shares in the last quarter. 83.59% of the stock is owned by institutional investors and hedge funds.
About Rackspace Hosting
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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