RXT - Rackspace Technologies: 70% Upside Is Just The Start

• Rackspace Technologies is a pureplay multicloud service provider that enables customers to manage their cloud platforms.
• The company has built its proprietary software called Rackspace Fabric with over 1bn USD of investment, which enables clients to migrate their workflows and applications to the cloud.
• COVID-19 has created a secular tailwind for Rackspace’s software and consulting services resulting in large demand for its services.
• Fair valuation for this stock should be ~$28.3utilzing a forward EV/uFCF of ~22x inline with comparables representing a 70% upside from the current prices.
• Key Strengths include: market leader in pureplaymulticloud services, proprietary technology and strong technological moat. Key Risks include: intense competition and high leverage.

For further details see: