Rackspace Technology (NASDAQ:RXT – Get Free Report) and Rumble (NASDAQ:RUM – Get Free Report) are both business services companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, analyst recommendations, earnings, profitability and dividends.
Institutional & Insider Ownership
82.5% of Rackspace Technology shares are held by institutional investors. Comparatively, 26.2% of Rumble shares are held by institutional investors. 1.0% of Rackspace Technology shares are held by insiders. Comparatively, 72.9% of Rumble shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Profitability
This table compares Rackspace Technology and Rumble’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Rackspace Technology | -28.79% | N/A | -1.55% |
| Rumble | -163.37% | -54.31% | -44.57% |
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rackspace Technology | 2 | 4 | 1 | 0 | 1.86 |
| Rumble | 0 | 2 | 0 | 0 | 2.00 |
Rackspace Technology currently has a consensus target price of $2.15, suggesting a potential downside of 14.34%. Rumble has a consensus target price of $8.00, suggesting a potential upside of 40.11%. Given Rumble’s stronger consensus rating and higher probable upside, analysts clearly believe Rumble is more favorable than Rackspace Technology.
Risk and Volatility
Rackspace Technology has a beta of 1.97, suggesting that its stock price is 97% more volatile than the S&P 500. Comparatively, Rumble has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500.
Valuation and Earnings
This table compares Rackspace Technology and Rumble”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rackspace Technology | $2.83 billion | 0.20 | -$837.80 million | ($3.96) | -0.63 |
| Rumble | $80.96 million | 27.44 | -$116.42 million | ($0.64) | -8.92 |
Rumble has lower revenue, but higher earnings than Rackspace Technology. Rumble is trading at a lower price-to-earnings ratio than Rackspace Technology, indicating that it is currently the more affordable of the two stocks.
Summary
Rackspace Technology beats Rumble on 8 of the 14 factors compared between the two stocks.
About Rackspace Technology
Rackspace Technology, Inc. operates as a multi cloud technology services company in the Americas, Europe, the Middle East, Africa, and The Asia-Pacific region. It operates through three segments: Multicloud Services, Apps & Cross Platform, and OpenStack Public Cloud. The company provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; professional services related to designing and building multi cloud solutions and cloud-native applications; and managed hosting and colocation services. It also helps customers establish governance, operational, and architectural frameworks to mitigate risks and reduce inefficiencies to manage costs, achieve industry-specific compliance objectives, and enhance security. In addition, the company offers managed applications, including running large-scale SaaS applications for customers on its and public cloud infrastructure; 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.
About Rumble
Rumble Inc. operates video sharing platforms in the United States, Canada, and internationally. The company operates rumble.com, a free-to-use video sharing and livestreaming platform where users can subscribe to channels to stay in touch with creators, and access video on-demand (VOD) and live content streamed by creators. It also operates locals.com, a platform where users can access free content and purchase subscriptions to support creators and access exclusive content in creator communities; Rumble Streaming Marketplace, a patent-pending application designed to enable a first-of-its-kind livestreaming and monetization service for creators; and Rumble Advertising Center (RAC), an online advertising management exchange. The company was founded in 2013 and is headquartered in Longboat Key, Florida.
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