Shares of Rackspace (
) are trading up nearly 1.7 percent Monday ahead of the release of
its fourth-quarter results after the closing bell.
The Wall Street quarterly consensus for Rackspace is $0.15 per
share in earnings on $281.02 million in sales. During the fourth
quarter of last year, the company reported earnings of $0.10 per
share on $214.73 million in total sales.
For the fiscal year 2011, analysts on the Street are currently
estimating $0.53 per share in earnings on $1.02 billion in total
The fourth quarter conference call is scheduled for 4:30 pm ET.
Dial In: 877-718-5099 for U.S. and Canada; 719-325-4825 for
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According to data from Bloomberg, shares of Rackspace Hosting have
12 Buy ratings, eight Hold ratings and one Sell ratings. The
average price target on shares of RAX is $48.50 with a range from
$40 to $58.
- In relation to the previous quarter, Goldman Sachs forecasts
foreign currency may play a slight headwind. For the quarter, the
firm estimates earnings will total $0.15 per share on $281
million in revenues, inline with the Street's consensus.
An analyst at Goldman comments, "We expect RAX to once again
provide annual customer gear capex estimates which should help
investors further triangulate revenue growth expectations. Our
2012 customer capex forecast of $269 million and 32 percent
constant currency growth rate implies a 49 percent ratio of
growth capex to incremental revenues consistent with historic
Goldman is reiterating its Buy rating and $54 price target.
- Wells Fargo anticipates that lower FX rates will create $1.2
million in revenues headwinds during the quarter, similar to
Goldman. The firm believes investors will mainly be focusing on
new product initiatives, international expansion and positive
commentary on enterprise wins during the conference call. Wells
Fargo estimates total revenues of $280 million and EBITDA of
$93.4 million of the quarter.
"We remain very positive on RAX going into Q4 earnings as our
channel checks with industry contacts, private managed hosting /
cloud providers and even collocation companies indicate demand
trends remain strong and that growth for managed hosting / cloud
services should accelerate in 2012," reports an analyst at Wells
Fargo. "Based on our checks, we are confident that revenue growth
will accelerate in 2012 from an estimated 29% organic rate in
Wells Fargo is reaffirming its Outperform rating and the company
going into the quarterly conference.
- Dougherty & Company predicts RAX added 4,500 servers
during the quarter and noted the CAPX for these servers may be
elevated due to the Thailand flooding effect on server pricing.
For the quarter, the firm estimates EBITDA will total $93.8
million as revenues total $280 million.
An analyst at Dougherty & Co. states, "We believe Rackspace
offers a compelling cloud solution to its SMB customers, and we
believe this segment of IT will be one of the fastest growing
segments over the next few years. However, we believe the strong
market position and growth prospects have been fully incorporated
into the valuation."
Dougherty & Co. is maintaining its Neutral rating and $40
price target on the company going into the quarterly