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Why Investors Should Take A Look At Rackspace Technology

Why Investors Should Take A Look At Rackspace Technology

Rackspace Technology, Inc. (NASDAQ: RXT) has transformed its business by providing multicloud services to hyperscale cloud infrastructure providers. The company has also established a “robust partner ecosystem,” which includes, Inc.'s (NASDAQ: AMZN) AWS, Alphabet Inc.'s (NASDAQ: GOOGL) (NASDAQ: GOOG) Google Cloud, and Microsoft Corporation's (NASDAQ: MSFT) Azure, according to William Blair.

The Rackspace Technology Analyst: Jim Breen initiated coverage of Rackspace Technology with an Outperform rating.

The Rackspace Technology Thesis: The company address a “large and growing market opportunity,” Breen said in the initiation mote.

“The prevalence of a multicloud approach has created integration and operational complexity that require expertise and resources most companies lack. This creates an opportunity for a multicloud services partner to enable businesses to fully realize the benefits of cloud transformation,” he explained.

The analyst quoted IDC estimates for the managed cloud services market, which projects 15% growth per annum to cross $100 billion by 2024.

Breen expects bookings momentum to drive revenue growth over the next few years. “In addition, the capital-light business model and increasing profitability will lead to strong free cash flow growth,” he wrote.

RXT Price Action: Shares of Rackspace Technology had risen by 0.97% to $24.01 at the time of publication Thursday.

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(Photo: Rackspace Technology)

Latest Ratings for RXT

Apr 2021Raymond JamesInitiates Coverage OnOutperform
Apr 2021William BlairInitiates Coverage OnOutperform
Aug 2020Deutsche BankInitiates Coverage OnBuy

View More Analyst Ratings for RXT
View the Latest Analyst Ratings


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