Story updated at 9:40 a.m. to reflect market activity.
Shares of Rackspace were gaining 0.9% o $43.09 in morning trading.
The analyst firm set a price target of $52 for the IT services company. Barclays analysts Amir Rozwadowski and Sandeep Gupta said Rackspace's cloud, hosting, and data center segments are "fundamentally attractive," citing underlying data traffic tends, declining, computer costs, and the increasing complexity of the software ecosystems as drivers for the segments.
The analysts wrote, "While businesses increasingly look to deploy cloud-based IT infrastructure (+35% YoY market growth through 2018E), rapidly evolving IT ecosystems add to the complexity of embracing an outsourced business model. Particularly for non-technology companies, this complexity can be a hindrance in moving to the cloud, thereby making Rackspace's managed resource suite an attractive solution."
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Separately, TheStreet Ratings team rates RACKSPACE HOSTING INC as a Hold with a ratings score of C. TheStreet Ratings 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 increase in net income, robust revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity and relatively poor performance when compared with the S&P 500 during the past year."