Cowen Reiterates Outperform on Rackspace (RAX) Following 3Q Revenue Beat
Cowen reiterated an Outperform rating on Rackspace (NYSE: RAX), and price target of $52.00 (from $48.00), following the company's 3Q earnings report. RAX reported solid 3Q15 results including rev/EBITDA that beat expectations largely driven by the previously announced enterprise deals that were pushed into 3Q and also slightly higher seasonal growth within its public cloud business.
Analyst Colby Synesael commented, "RAX’s stock was up ~8% in the aftermarket following solid 3Q15 results including rev/ EBITDA that handily beat expectations and maintained 2015 guidance. We continue to believe its fundamental business is meaningfully better than implied in current valuation and remain positive on the stock although we believe it will take several quarters of consistent execution to realize our $52 PT."
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Shares of Rackspace closed at $27.09 yesterday.