Rackspace Hosting Inc. (RAX): Today's Featured Computer Software & Services Laggard

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Rackspace Hosting ( RAX) pushed the Computer Software & Services industry lower today making it today's featured Computer Software & Services laggard. The industry as a whole closed the day up 0.8%. By the end of trading, Rackspace Hosting fell $7.71 (-19.1%) to $32.65 on heavy volume. Throughout the day, 24,697,095 shares of Rackspace Hosting exchanged hands as compared to its average daily volume of 3,021,700 shares. The stock ranged in price between $32.64-$37.30 after having opened the day at $36.00 as compared to the previous trading day's close of $40.36. Other companies within the Computer Software & Services industry that declined today were: Jive Software ( JIVE), down 7.2%, WebMD Health Corporation ( WBMD), down 5.0%, Nuance Communications ( NUAN), down 5.0% and Majesco Entertainment Company ( COOL), down 4.4%.

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 $5.5 billion and is part of the technology sector. Shares are up 3.1% year to date as of the close of trading on Monday. Currently there are 6 analysts that rate Rackspace Hosting a buy, 2 analysts rate it a sell, and 14 rate it a hold.

TheStreet Ratings rates Rackspace Hosting as a hold. 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.

On the positive front, China Digital TV ( STV), up 31.9%, Innovative Solutions and Support ( ISSC), up 21.9%, UBIC Inc ADR ( UBIC), up 19.2% and Demandware ( DWRE), up 10.4% , were all gainers within the computer software & services industry with International Business Machines ( IBM) being today's featured computer software & services industry leader.

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).

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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