Thursday, August 9, 2012

Rackspace Hosting: Q2 Growth Not Fast Enough For Valuation

After the close on Tuesday, Rackspace Hosting (RAX) posted earnings that beat analyst estimates and sent the stock soaring over 11% in after hours trading. Revenues jumped 29% year-over-year and net income soared 43% from last year.

The company is a leading provider of public and private cloud and hybrid and dedicated hosting services. It delivers open technologies and powers more than 190,000 customers worldwide

Unfortunately though for a company with a market cap of $6.6B, it continues to report relatively low free cash flows. This quarter the total free cash flow was only $28.7M or just over $100M on a annualized basis.

Read the full article on Seeking Alpha.


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