Rackspace Technology Inc. (RXT): What Does Valuation Ratios Tell Us?

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Rackspace Technology Inc. (NASDAQ:RXT) saw an upside of 2.42% to $2.76 after adding $0.07 on Monday. The 5-day average trading volume is 1,194,624 shares of the company’s common stock. It has gained $3.13 in the past week and touched a new high 1 time within the past 5 days. An average of 3,559,136 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 2,286,408.

RXT’s 1-month performance is -31.90% or -$0.47 on its low of $2.51 reached on 12/27/22. The company’s shares have touched a 52-week low of $2.51 and high of $13.71, with the stock’s rally to the 52-week high happening on 01/03/23. YTD, RXT has lost -8.81% or -$0.19 and has reached a new high 1 time. However, the current price is down -79.91% from the 52-week high price.


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Valuation Metrics

Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.19 while the price-to-book (PB) in the most recent quarter is 0.70, with the price to cash flow ratio at 3.02.

Rackspace Technology Inc.’s quick ratio for the period ended September 29 was 1.30, with the current ratio over the same period at 1.30. As well, the company’s long term debt to equity for the quarter ending September 29 was 4.48, while the total debt to equity was 4.61. In terms of profitability, the gross margin trailing 12 months is 28.60%. The firm’s gross profit as reported stood at $936.8 million against revenue of $3.01 billion.

Earnings Surprise

For the quarterly period ending September 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 93.2% to -$511.7 million, while revenue of -$40.6 million was 92.07% off the previous quarter. Analysts expected RXT to announce $0.09 per share in earnings in its latest quarter, but it posted $0.1, representing a 11.10% surprise. EBITDA for the quarter stood at more than $42.5 million. RXT stock balance sheet for the quarter ending September 29 shows that total liabilities totaled 4.87 billion, with total debt at $3.97 billion. Shareholders hold equity totaling $211.11 million.

Let’s look briefly at Rackspace Technology Inc. (RXT) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 06 January was 38.16% to suggest the stock is trending Neutral, with historical volatility in this time period at 73.36%.

The stock’s 5-day moving average is $2.81, reflecting a -6.78% or -$0.19 change from its current price. RXT is currently trading -13.80% above its 20-day SMA, -51.35% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by -43.48% and SMA200 by-74.79%.

Stochastic %K and %D was 34.12% and 36.35% and the average true range (ATR) pointed at 0.24. The RSI (14) points at 36.69%, while the 14-day stochastic is at 39.60% with the period’s ATR at 0.27. The stock’s 9-day MACD Oscillator is pointing at -0.05 and -0.04 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Rackspace Technology Inc. (NASDAQ: RXT), Evercore ISI downgraded it to an In-line rating. They previously had an Outperform rating on the stock.

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