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RAX is involved heavily in the cloud computing space. |
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Released on Tuesday, February 14, 2012, 6:00 PM ET
Pittsburgh, PA (SpeculatingStocks) - One of the hottest growth areas in the economy right now is the growth of the Internet. Much like in the late 90's, the Internet is going through another growth spurt and it takes a lot of hosting to handle all of the demand from Web users for social media. Between servicing users surfing the Internet from their computers, tablets and smart phones and emerging markets coming online, demand is more than ever.
Rackspace Hosting (NYSE:RAX) is helping Websites and the social web meet the demand. RAX is in the business of hosting and cloud computing. The company provides information technology (IT) as a service, managing Web-based IT systems for small and medium-sized businesses, as well as large enterprises worldwide.
One of RAX's main competitors is Amazon Web Services (AWS) and RAX is competing quite well against them. Rackspace reported Q4 results after the bell yesterday. Revenue for the quarter grew 32% to $283 million YOY and net income reached $25 million, up 85% YOY. Total server count increased to 79,805, up from 78,717 servers at the end of the previous quarter, and total customers increased to 172,510, up from 161,422 at the end of the previous quarter. Fortune magazine named Rackspace among the "100 Best Companies to Work For."
RAX moved $6.22 to $55.45 during Tuesday, February 14, 2012 after the Q4 release. RAX appears to have significant room to move higher after its breakout today. The fundamentals of this company changed with the Q4 release and that's why we saw a gap higher in today's session. The views of the company were reset. We believe that RAX could become a tremendous long-term play.
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