Head-To-Head Contrast: Rackspace Technology (NASDAQ:RXT) vs. VeriSign (NASDAQ:VRSN)

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for Rackspace Technology and VeriSign, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rackspace Technology	1	1	0	0	1.50
VeriSign	0	1	4	1	3.00

Rackspace Technology currently has a consensus target price of $4.00, indicating a potential upside of 5.26%. VeriSign has a consensus target price of $333.00, indicating a potential upside of 9.86%. Given VeriSign’s stronger consensus rating and higher possible upside, analysts plainly believe VeriSign is more favorable than Rackspace Technology.

Risk and Volatility

Rackspace Technology has a beta of 3.05, meaning that its stock price is 205% more volatile than the S&P 500. Comparatively, VeriSign has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rackspace Technology	-5.88%	N/A	-1.81%
VeriSign	49.76%	-39.20%	58.32%

Earnings and Valuation

This table compares Rackspace Technology and VeriSign”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rackspace Technology	$2.69 billion	0.36	-$225.80 million	($0.65)	-5.85
VeriSign	$1.66 billion	16.52	$825.70 million	$9.22	32.88

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

Institutional & Insider Ownership

82.5% of Rackspace Technology shares are held by institutional investors. Comparatively, 92.9% of VeriSign shares are held by institutional investors. 2.3% of Rackspace Technology shares are held by insiders. Comparatively, 0.6% of VeriSign shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Summary

VeriSign beats Rackspace Technology on 11 of the 15 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 VeriSign

VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce. It operates directory for .name and .cc; and back-end systems for .edu, domain names. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.