Direct Digital (NASDAQ: DRCT) vs. Rackspace Technology (NASDAQ: RXT) Financial Comparison


Direct Digital (NASDAQ: DRCT – Get Rating) and Rackspace Technology (NASDAQ: RXT – Get Rating) are both small-cap business services companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Earnings & Valuation

This table compares Direct Digital and Rackspace Technology’s revenue, earnings per share and valuation.

Gross Revenue Price / Sales Ratio Net Income Earnings Per Share Price / Earnings Ratio
Direct Digital $ 38.14 million 0.17 ON ON ON
Rackspace Technology $ 3.01 billion 0.49 – $ 218.30 million ($ 0.92) -7.62

Direct Digital has higher earnings, but lower revenue than Rackspace Technology.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Direct Digital and Rackspace Technology, as reported by MarketBeat.com.

Sell ​​Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Direct Digital 0 0 3 0 3.00
Rackspace Technology 1 4 5 0 2.40

Direct Digital presently has a consensus price target of $ 5.83, suggesting a potential upside of 155.85%. Rackspace Technology has a consensus price target of $ 13.25, suggesting a potential upside of 89.02%. Given Direct Digital’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Direct Digital is more favorable than Rackspace Technology.

Institutional and Insider Ownership

9.6% of Direct Digital shares are owned by institutional investors. Comparatively, 95.9% of Rackspace Technology shares are owned by institutional investors. 2.1% of Rackspace Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

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

Net Margins Return on Equity Return on Assets
Direct Digital ON ON ON
Rackspace Technology -6.30% 14.99% 3.20%

Summary

Rackspace Technology beats Direct Digital on 7 of the 10 factors compared between the two stocks.

About Direct Digital

(Get Rating)

Direct Digital Holdings, Inc. operates as an end-to-end full-service programmatic advertising platform. The company’s platform primarily focuses on providing advertising technology, data-driven campaign optimization, and other solutions to underserved and less efficient markets on both the buy- and sell-side of the digital advertising ecosystem. It serves various industry verticals, such as travel, healthcare, education, financial services, consumer products, etc. with focus on small- and mid-sized businesses. The company was founded in 2018 and is headquartered in Houston, Texas.

About Rackspace Technology

(Get Rating)

Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide. It operates through Multicloud Services and Apps & Cross Platform segments. The company’s Multicloud Services segment provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; and professional services related to designing and building multi cloud solutions and cloud-native applications. Its Apps & Cross Platform segment includes managed applications; 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.



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