NEW YORK (TheStreet) -- Shares of Rackspace Hosting
(RAX - Get Report) were trading lower on Tuesday morning after fourth-quarter revenue came in lower than expected and CEO Lanham Napier announced his surprise departure.
Before market open, the stock had tumbled 11.6% to $35.70.
Must Read: Rackspace Plunges: What Wall Street's Thinking
Must Read: Rackspace Hosting (RAX) Tumbles After Earnings, CEO Departure
Ratings team rates RACKSPACE HOSTING INC as a Hold with a ratings score of C. The team has this to say about their recommendation:
"We rate RACKSPACE HOSTING INC (RAX) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."