William Blair & Company initiated research coverage of Rackspace Technology, Inc. (RXT $23.78), a leading end-to-end multicloud technology services company. Rackspace designs, builds, and operates its customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model.
Analyst Jim Breen estimated that the company would earn $1.00 per share in 2021 and $1.26 per share in 2022.
“Rackspace has transformed its business from one that competes with hyperscale cloud infrastructure providers to one that works in partnership with them by providing multicloud services with unbiased technological expertise, guidance, and resources that appeal to businesses that want to implement multiple cloud technologies and maximize their benefits,” Breen said. “The company has invested in multiple high-growth service offerings and has established
a robust partner ecosystem that includes cloud infrastructure partners such as Amazon, Google, and Microsoft. Its growth is closely aligned to enterprise cloud adoption and it competes in a large and growing market. We expect bookings momentum to drive revenue acceleration over the next few years. In addition, the capital-light business model and increasing profitability will lead to strong free cash flow growth.”
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Outperform (Buy): 74%
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