Are You Expecting This From Rackspace Hosting?

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Rackspace Hosting (NYS: RAX) is expected to report Q2 earnings on Aug. 7. Here's what Wall Street wants to see.

The 10-second takeaway
Comparing the upcoming quarter with the prior-year quarter, average analyst estimates predict Rackspace Hosting's revenues will increase 28.7% and EPS will grow 46.2%.

The average estimate for revenue is $318.2 million. On the bottom line, the average EPS estimate is $0.19.


Revenue details
Last quarter, Rackspace Hosting logged revenue of $301.4 million. GAAP reported sales were 31% higher than the prior-year quarter's $230.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
Last quarter, EPS came in at $0.17. GAAP EPS of $0.17 for Q1 were 70% higher than the prior-year quarter's $0.10 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Recent performance
For the preceding quarter, gross margin was 71.1%, 140 basis points better than the prior-year quarter. Operating margin was 12.3%, 190 basis points better than the prior-year quarter. Net margin was 7.7%, 170 basis points better than the prior-year quarter.

Looking ahead
The full year's average estimate for revenue is $1.32 billion. The average EPS estimate is $0.81.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 886 members out of 942 rating the stock outperform, and 56 members rating it underperform. Among 189 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 172 give Rackspace Hosting a green thumbs-up, and 17 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rackspace Hosting is outperform, with an average price target of $56.95.

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The article Are You Expecting This From Rackspace Hosting? originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is the co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. Motley Fool newsletter services recommend Rackspace Hosting. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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