Rackspace Hosting, in the Spotlight Soon

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Rackspace Hosting (NYS: RAX) is expected to report Q4 earnings on Feb. 12. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Rackspace Hosting's revenues will grow 25.5% and EPS will grow 22.2%.

The average estimate for revenue is $355.4 million. On the bottom line, the average EPS estimate is $0.22.


Revenue details
Last quarter, Rackspace Hosting chalked up revenue of $336.0 million. GAAP reported sales were 27% higher than the prior-year quarter's $264.6 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 $0.19. GAAP EPS of $0.19 for Q3 were 36% higher than the prior-year quarter's $0.14 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 72.5%, 270 basis points better than the prior-year quarter. Operating margin was 13.5%, 180 basis points better than the prior-year quarter. Net margin was 8.1%, 50 basis points better than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $1.31 billion. The average EPS estimate is $0.76.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 922 members out of 1,002 rating the stock outperform, and 80 members rating it underperform. Among 245 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 217 give Rackspace Hosting a green thumbs-up, and 28 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 $59.48.

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The article Rackspace Hosting, in the Spotlight Soon 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 co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. TMFDisclosureHere

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