Financial Survey: Rackspace Technology (NASDAQ:RXT) versus Locafy (NASDAQ:LCFY)

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

Analyst Recommendations

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

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rackspace Technology	1	2	0	0	1.67
Locafy	0	0	0	0	0.00

Rackspace Technology currently has a consensus price target of $1.63, suggesting a potential upside of 36.11%. Given Rackspace Technology’s stronger consensus rating and higher probable upside, equities analysts plainly believe Rackspace Technology is more favorable than Locafy.

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rackspace Technology	$2.71 billion	0.11	-$837.80 million	($1.28)	-0.94
Locafy	$3.85 million	1.63	-$1.96 million	($1.23)	-3.70

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

Insider & Institutional Ownership

82.5% of Rackspace Technology shares are held by institutional investors. Comparatively, 0.0% of Locafy shares are held by institutional investors. 2.9% of Rackspace Technology shares are held by company insiders. Comparatively, 28.7% of Locafy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk and Volatility

Rackspace Technology has a beta of 2.14, indicating that its share price is 114% more volatile than the S&P 500. Comparatively, Locafy has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rackspace Technology	-31.51%	N/A	-1.77%
Locafy	-58.48%	-64.65%	-36.58%

Summary

Rackspace Technology beats Locafy on 9 of the 13 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 Locafy

Locafy Limited operates as a software-as-a-service company (SaaS) that specializes in search engine marketing in Australia, New Zealand, Europe, North America, and internationally. The company operates in three segments: Publishing, Direct Sales, and Reseller Sales. It focuses on commercializing its SaaS online publishing technology platform that comprises an integrated suite of solutions. The company also owns and operates several online directories and offers search engine optimization solutions, which include creation of proximity pages and proximity networks, local pages, and map pack booster. In addition, its platform publishes content to various devices that uses a web browser to display web content, as well as programmatically optimizes the published content for local search. The company offers its solutions directly to customers, as well as through digital agencies and search engine optimization freelancers. The company was formerly known as Moboom Limited and changed its name to Locafy Limited in January 2021. Locafy Limited was incorporated in 2009 and is based in Subiaco, Australia.