Analysts React to Rackspace Earnings with Downgrades
Since the cloud MSP reported its second-quarter earnings, investment analysts have changed their ratings.
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In the wake of the latest round of Rackspace earnings, investment analysts have changed their expectations for the company’s performance.
Recall that, last week, Rackspace earnings came in lower than hoped. Rackspace — the Texas-based managed cloud computing provider — already had said its second-quarter per-share earnings would weaken compared to previous periods. It reported 17 cents per share; analysts wanted to see 23 cents per share. Overall, Rackspace showed a net loss of $40.6 million for the three months ended June 30. Its revenue rose a mere 4% compared to a year ago. That was $12.5 million less than analysts had forecast.
Much of Rackspace’s performance will hinge on how it tackles its public-cloud-private-cloud conundrum. At first, this past May, Rackpace execs said they were exploring sale options. That tactic appears to have dissolved in favor of splitting the company into two groups, though there is not yet confirmation on that. All eyes are on Rackspace’s analyst day, coming up next month.
In the intervening weeks, investment analysts may continue to deliver recommendations stemming from the Aug. 9 Rackspace earnings call and subsequent guidance. Find out what big names – including Credit Suisse, Royal Bank of Canada, Raymond James and Barclays – already have done in the past week. See the slideshow above.
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