Wells Fargo Raises Valuation Range on Rackspace (RAX), Calls Guidance Conservative
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Rating Summary:
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Today's Overall Ratings:
Up: 17 | Down: 23 | New: 12
Rating Summary:
5 Buy, 21 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 17 | Down: 23 | New: 12
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Wells Fargo is reaffirming its Outperform rating on Rackspace (NYSE: RAX) and is raising its valuation range from $53-$58 to $60-$62.
The company reported solid Q4 results as sales and earnings both topped expectations. "We believe that the steadily improving trend here is a clear sign that demand for managed hosting and cloud remains strong," reports the firm.
Wells Fargo highlights RAX's fiscal 2012 guidance appears to be conservative because the company is is becoming more efficient from a capital standpoint. 2012 revenue growth of over 30 percent would not surprise the firm.
For Q1, the firm forecasts EPS of $0.74. Wells Fargo also lowered its FY12 EPS estimate from $3.30 to $3.22 based on new margin assumptions.
For an analyst ratings summary and ratings history on Rackspace click here. For more ratings news on Rackspace click here.
Shares of Rackspace closed at $49.23 yesterday.
The company reported solid Q4 results as sales and earnings both topped expectations. "We believe that the steadily improving trend here is a clear sign that demand for managed hosting and cloud remains strong," reports the firm.
Wells Fargo highlights RAX's fiscal 2012 guidance appears to be conservative because the company is is becoming more efficient from a capital standpoint. 2012 revenue growth of over 30 percent would not surprise the firm.
For Q1, the firm forecasts EPS of $0.74. Wells Fargo also lowered its FY12 EPS estimate from $3.30 to $3.22 based on new margin assumptions.
For an analyst ratings summary and ratings history on Rackspace click here. For more ratings news on Rackspace click here.
Shares of Rackspace closed at $49.23 yesterday.
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