Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model Rackspace Hosting (
RAX) pushed the Computer Software & Services industry higher today making it today's featured computer software & services winner. The industry as a whole closed the day up 1.2%. By the end of trading, Rackspace Hosting rose $1.84 (4.1%) to $47.12 on light volume. Throughout the day, 1,459,894 shares of Rackspace Hosting exchanged hands as compared to its average daily volume of 2,441,100 shares. The stock ranged in a price between $45.41-$47.76 after having opened the day at $45.58 as compared to the previous trading day's close of $45.28. Other companies within the Computer Software & Services industry that increased today were:
China Mobile Games and Entertainment Group (
CMGE), up 15.9%,
ServiceNow (
NOW), up 15.3%,
AVG Technologies (
AVG), up 13.0% and
Open Text Corporation (
OTEX), up 12.9%.
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Rackspace Hosting, Inc., through its subsidiaries, provides cloud computing services, managing Web-based IT systems for small and medium-sized businesses, and large enterprises worldwide. Rackspace Hosting has a market cap of $6.3 billion and is part of the technology sector. The company has a P/E ratio of 60.9, above the S&P 500 P/E ratio of 17.7. Shares are down 39.0% year to date as of the close of trading on Wednesday.
TheStreet Ratings rates Rackspace Hosting as a
buy. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.
On the negative front,
Intuit (
INTU), down 11.1%,
Intelligent Systems (
INS), down 6.6%,
FalconStor Software (
FALC), down 6.3% and
Unwired Planet (
UPIP), down 5.8% , were all laggards within the computer software & services industry with
Citrix Systems (
CTXS) being today's computer software & services industry laggard.
For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the computer software & services industry could consider
iShares S&P NA Tech Software Idx (
IGV) while those bearish on the computer software & services industry could consider
ProShares Ultra Short Technology (
REW).
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