Reviewing Rackspace Technology (NASDAQ:RXT) & V2X (NYSE:VVX)

Rackspace Technology (NASDAQ:RXT) and V2X (NYSE:VVX) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares Rackspace Technology and V2X’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rackspace Technology	-5.41%	N/A	-1.55%
V2X	1.88%	16.94%	5.74%

Valuation & Earnings

This table compares Rackspace Technology and V2X”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rackspace Technology	$2.69 billion	0.39	-$225.80 million	($0.61)	-6.80
V2X	$4.48 billion	0.51	$77.88 million	$2.79	26.31

V2X has higher revenue and earnings than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than V2X, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Rackspace Technology has a beta of 2.23, meaning that its stock price is 123% more volatile than the S&P 500. Comparatively, V2X has a beta of 0.12, meaning that its stock price is 88% less volatile than the S&P 500.

Insider and Institutional Ownership

82.5% of Rackspace Technology shares are owned by institutional investors. Comparatively, 95.2% of V2X shares are owned by institutional investors. 2.9% of Rackspace Technology shares are owned by insiders. Comparatively, 1.0% of V2X shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Rackspace Technology and V2X, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rackspace Technology	1	3	0	0	1.75
V2X	1	4	5	1	2.55

Rackspace Technology currently has a consensus price target of $1.95, suggesting a potential downside of 53.01%. V2X has a consensus price target of $77.80, suggesting a potential upside of 5.99%. Given V2X’s stronger consensus rating and higher probable upside, analysts clearly believe V2X is more favorable than Rackspace Technology.

Summary

V2X beats Rackspace Technology on 13 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 V2X

V2X, Inc. provides critical mission solutions and support services to defense clients worldwide. It offers a suite of integrated solutions across the operations and logistics, aerospace, training, and technology markets to national security, defense, civilian, and international clients. The company was incorporated in 2014 and is headquartered in Mclean, Virginia.