Q3 Preview: Rackspace (RAX) Looks to Keep Momentum Going with Earnings
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Price: $31.99 --0%
Rating Summary:
5 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 6 | New: 33
Rating Summary:
5 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 6 | New: 33
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Shares of Rackspace Hosting Inc. (NYSE: RAX) are down 6 cents to $26.40 in midday market movement on Monday ahead of the company's third-quarter earnings release scheduled for after the closing bell.
The hosting and cloud computing company is expected by analysts to report earnings of $0.09 per share on revenue of $197.56 million.
In the second quarter, Rackspace reported earnings of $0.08 per share, in line with the analyst estimate. The company reported second-quarter revenue of $187.3 million, missing the consensus of $186.83 million.
Since the start of the third quarter, shares of Rackspace are up $7.09 or 36.72 percent. Year-to-date the stock is up $5.55 or 26.62 percent.
A valuation shows that Rackspace is going for a forward P/E of 92.29x full year 2010 estimates.
Data from Bloomberg shows that 21 analysts have a Buy rating on the stock, 6 have a Hold and 2 have a Sell. The average analyst price target on Rackspace is $26 with a target range of $13.50 to $32.
Analysts comments
Kaufman Bros. analysts maintain a Buy rating on Rackspace with a price target of $24.
Kaufman Bros. analyst says, "We continue to believe that Rackspace is well positioned to take advantage of the evolution in computing as more compute work becomes centralized and managed outside of a company's walls. We believe it is gaining traction among enterprise customers, having only recently launched a Windows OS for the cloud, doubling its addressable base from Linux alone, and will be launching its cloud product in Europe before the end of the year."
On October 7, Deutsche Bank analysts raised their price target on Rackspace from $25 to $27 while maintaining a Buy rating on the stock.
Deutsche Bank analyst says, "We expect several new service offerings to be brought to market soon. Critical Sites is a higher level of support for critical applications with deeper monitoring and faster response times, which receives a premium price. Hybrid Hosting should be launched by year end, which offers integrated cloud and managed hosting in a single application."
The hosting and cloud computing company is expected by analysts to report earnings of $0.09 per share on revenue of $197.56 million.
In the second quarter, Rackspace reported earnings of $0.08 per share, in line with the analyst estimate. The company reported second-quarter revenue of $187.3 million, missing the consensus of $186.83 million.
Since the start of the third quarter, shares of Rackspace are up $7.09 or 36.72 percent. Year-to-date the stock is up $5.55 or 26.62 percent.
A valuation shows that Rackspace is going for a forward P/E of 92.29x full year 2010 estimates.
Data from Bloomberg shows that 21 analysts have a Buy rating on the stock, 6 have a Hold and 2 have a Sell. The average analyst price target on Rackspace is $26 with a target range of $13.50 to $32.
Analysts comments
Kaufman Bros. analysts maintain a Buy rating on Rackspace with a price target of $24.
Kaufman Bros. analyst says, "We continue to believe that Rackspace is well positioned to take advantage of the evolution in computing as more compute work becomes centralized and managed outside of a company's walls. We believe it is gaining traction among enterprise customers, having only recently launched a Windows OS for the cloud, doubling its addressable base from Linux alone, and will be launching its cloud product in Europe before the end of the year."
On October 7, Deutsche Bank analysts raised their price target on Rackspace from $25 to $27 while maintaining a Buy rating on the stock.
Deutsche Bank analyst says, "We expect several new service offerings to be brought to market soon. Critical Sites is a higher level of support for critical applications with deeper monitoring and faster response times, which receives a premium price. Hybrid Hosting should be launched by year end, which offers integrated cloud and managed hosting in a single application."
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