Canaccord Genuity Maintains a 'Hold' on Rackspace (RAX); Business Transitioning

May 8, 2012 8:57 AM EDT
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Price: $31.99 --0%

Rating Summary:
    7 Buy, 25 Hold, 3 Sell

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    Up: 30 | Down: 30 | New: 23
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Canaccord Genuity maintains a 'Hold' on Rackspace (NYSE: RAX) price target of $50.00.

Analyst, Greg Miller, said, "Although we continue to believe in the strength of the data center/cloud computing model, we continue to favor asset intensive companies such as Equinix (Nasdaq: EQIX) (carrier neutral colo) over companies like Rackspace. With weaker than expected 1Q12 customer additions and higher employee hires, it remains unclear if we might be on the cusp of slower than expected future revenue growth, lower margins or both. Either way, we believe investors will need to see a reacceleration in customer growth for confidence in the outlook before aggressively pursuing the stock again."

For an analyst ratings summary and ratings history on Rackspace click here. For more ratings news on Rackspace click here.

Shares of Rackspace closed at $57.80 yesterday.

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