Rackspace Technology News Update

Summary:

• Rackspace Technology reported Q4 results exceeding expectations but issued lower guidance for Q1.
• CEO expressed satisfaction with Q4 performance and outlined a transition period for FY23.
• Analysts adjusted price targets for Rackspace Tech post Q4 results, with mixed reactions from investors.

Analysts Adjust Rackspace Technology Forecasts Post Q4 Results: What’s Next?

Rackspace TechnologyInc. (NASDAQ: RXT) recently reported fourth-quarter results that exceeded market expectations but issued first-quarter guidance below estimates. The company also announced refinancing transactions aimed at strengthening its capital structure.

According to data from Benzinga Pro, Rackspace Tech posted an adjusted loss of 3 cents per share for the quarter, beating market expectations for a loss of 4 cents per share. Quarterly sales came in at $720 million, slightly above estimates of $714.720 million.

CEO Amar Maletira expressed satisfaction with the company’s performance in the fiscal fourth quarter of 2023, highlighting progress made in revenue, operating profit, and EPS guidance. He emphasized that FY23 was a period of transition focused on implementing structural changes to facilitate a turnaround and capitalize on emerging technology trends.

Looking ahead to the first quarter, Rackspace Tech anticipates an adjusted loss ranging from 12 to 14 cents per share and revenue between $680 million and $690 million. These projections fell short of analyst estimates, with expectations set at a loss of 4 cents per share and revenue around $709.378 million.

Following this news, Rackspace Tech shares experienced a 16.6% decline, trading at $1.84 on Wednesday.

Several analysts have revised their price targets for Rackspace Tech in light of these developments:

• Evercore ISI Group lowered its price target from $3 to $2 while maintaining an In-Line rating.
• BMO Capital raised its price target from $1.5 to $2.5 with a Market Perform rating.
• Raymond James decreased its price target from $3.5 to $3 but upheld an Outperform rating.

The crux, Rackspace Technology’s recent financial results and guidance have generated mixed reactions among investors and analysts alike. The company’s strategic initiatives and focus on capital restructuring will be crucial factors to monitor as it navigates through ongoing market challenges.

For more information on the analysts’ revised forecasts, please visit: [These Analysts Revise Their Forecasts on Rackspace Technology After Q4 Results](link).