Head-To-Head Comparison: Rackspace Technology (NASDAQ:RXT) and Meta Platforms (NASDAQ:META)

Meta Platforms (NASDAQ:META) and Rackspace Technology (NASDAQ:RXT) are both computer and technology companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

79.9% of Meta Platforms shares are owned by institutional investors. Comparatively, 82.5% of Rackspace Technology shares are owned by institutional investors. 13.7% of Meta Platforms shares are owned by company insiders. Comparatively, 2.0% of Rackspace Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Meta Platforms and Rackspace Technology, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Meta Platforms	2	4	35	2	2.86
Rackspace Technology	1	4	1	0	2.00

Meta Platforms presently has a consensus target price of $621.63, suggesting a potential upside of 4.78%. Rackspace Technology has a consensus target price of $2.34, suggesting a potential downside of 7.44%. Given Meta Platforms’ stronger consensus rating and higher possible upside, research analysts clearly believe Meta Platforms is more favorable than Rackspace Technology.

Profitability

This table compares Meta Platforms and Rackspace Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Meta Platforms	34.34%	34.16%	22.89%
Rackspace Technology	-28.79%	N/A	-1.55%

Volatility & Risk

Meta Platforms has a beta of 1.22, suggesting that its stock price is 22% more volatile than the S&P 500. Comparatively, Rackspace Technology has a beta of 1.98, suggesting that its stock price is 98% more volatile than the S&P 500.

Valuation and Earnings

This table compares Meta Platforms and Rackspace Technology”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Meta Platforms	$149.78 billion	10.05	$39.10 billion	$17.41	34.08
Rackspace Technology	$2.83 billion	0.20	-$837.80 million	($3.72)	-0.68

Meta Platforms has higher revenue and earnings than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than Meta Platforms, indicating that it is currently the more affordable of the two stocks.

Summary

Meta Platforms beats Rackspace Technology on 13 of the 15 factors compared between the two stocks.

About Meta Platforms

Meta Platforms, Inc. engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs. The Family of Apps segment offers Facebook, which enables people to share, discuss, discover, and connect with interests; Instagram, a community for sharing photos, videos, and private messages, as well as feed, stories, reels, video, live, and shops; Messenger, a messaging application for people to connect with friends, family, communities, and businesses across platforms and devices through text, audio, and video calls; and WhatsApp, a messaging application that is used by people and businesses to communicate and transact privately. The Reality Labs segment provides augmented and virtual reality related products comprising consumer hardware, software, and content that help people feel connected, anytime, and anywhere. The company was formerly known as Facebook, Inc. and changed its name to Meta Platforms, Inc. in October 2021. The company was incorporated in 2004 and is headquartered in Menlo Park, California

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.