Rackspace Technology (NASDAQ:RXT – Get Rating) and PubMatic (NASDAQ:PUBM – Get Rating) are both small-cap business services companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, earnings, profitability, analyst recommendations, risk and valuation.
Insider and Institutional Ownership
88.2% of Rackspace Technology shares are held by institutional investors. Comparatively, 42.9% of PubMatic shares are held by institutional investors. 2.1% of Rackspace Technology shares are held by company insiders. Comparatively, 1.2% of PubMatic shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This table compares Rackspace Technology and PubMatic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Rackspace Technology presently has a consensus price target of $9.20, suggesting a potential upside of 81.46%. PubMatic has a consensus price target of $32.75, suggesting a potential upside of 101.91%. Given PubMatic’s stronger consensus rating and higher possible upside, analysts clearly believe PubMatic is more favorable than Rackspace Technology.
Earnings & Valuation
This table compares Rackspace Technology and PubMatic’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Rackspace Technology||$3.01 billion||0.35||-$218.30 million||($0.93)||-5.45|
|PubMatic||$226.91 million||3.71||$56.60 million||$0.96||16.90|
PubMatic has lower revenue, but higher earnings than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than PubMatic, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Rackspace Technology has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, PubMatic has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.
PubMatic beats Rackspace Technology on 10 of the 14 factors compared between the two stocks.
About Rackspace Technology
Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide. It operates through Multicloud Services and Apps & Cross Platform segments. The company's Multicloud Services segment provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; and professional services related to designing and building multi cloud solutions and cloud-native applications. Its Apps & Cross Platform segment includes managed applications; managed security services in the areas of security threat assessment and prevention, threat detection and response, rapid remediation, governance, and risk and compliance assistance across multiple cloud platforms, as well as privacy and data protection services, including detailed access restrictions and reporting; data services; and professional services related to designing and implementing application, security, and data services. Rackspace Technology, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.
PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The company's solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bidding management solution for OTT; Openwrap SDK, a header bidding solution for in-app developers; private marketplace solutions; and media buyer consoles. In addition, it offers Real-Time Bidding (RTB) programmatic technologies, which provides various selling options across screens and ad formats; digital advertising inventory quality solutions to detect and filter out invalid traffic and other nefarious activity; Ad quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that allows for the use of any advertiser preferred user identifier in a scaled and privacy-compliant fashion; Audience Encore, an audience data platform; and cross-platform video, a sell side platform, which connects trusted video buyers to premium publishers. The company's platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.
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