NEW YORK (TheStreet) -- Rackspace Hosting (RAX) stock closed higher by 2.57% to $21.58 in Thursday's trading session, on speculation that the data center hosting company is looking for a buyer, Barron's reports.
Hewlett-Packard Enterprise (HPE), IBM, Amazon.com (AMZN), and Microsoft (MSFT) are possible acquirers, according to CRN.
However, CLSA reduced its rating on shares to "sell" from "underperform" today, noting "a sale is highly unlikely for a few reasons," Barron's adds.
Cloud computing giants such as Microsoft, Alphabet's (GOOGL) Google and Amazon.com don't need Rackspace's inferior technology, according to the firm. IBM, Hewlett Packard and other potential suitors are unlikely to be able to do much with Rackspace's offerings.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C.
Rackspace's strengths such as its revenue growth, reasonable valuation levels and good cash flow from operations are countered by weaknesses including unimpressive growth in net income and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: RAX
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.