Shares of Rackspace Hosting Inc RAX experienced a significant reduction in share price Wednesday following the company’s decision to remain and independent public firm and not authorize a share repurchase program at this time.
Subsequent to this decision, analysts at multiple firms offered insight into the company.
Credit Suisse analysts feel the recent decline in stock price is a buying opportunity as Rackspace currently trades at a “significant” discount to its peers. In addition, Rackspace’s EBITDA is forecasted to grow 17 percent in 2015 well above the 10 percent average of its peers.
Analysts at Raymond James are also bullish on Rackspace shares, noting the appointment of CEO Taylor Rhodes as positive. Moreover, the recent M&A chatter demonstrates there is “strong demand for higher-end service provider like RAX.”
Morgan Stanley analysts also predict upside in shares of Rackspace as they continue to like the fundamentals of the company given the strong revenue growth last quarter.
On the other hand, analysts at CLSA downgraded shares of Rackspace to to Sell from Underperform, following the company’s decision to remain independent.
Shares of Rackspace Hosting Inc closed Wednesday’s session at $32.39 down 17.67 percent.
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