Shares of Rackspace Hosting
Analysts were looking for earnings of $0.18 per share on about $318 million in sales. Rackspace delivered $0.19 per share and $319 million, respectively, sliding past the Street's consensus by the slimmest of margins.
That's nice and all, but it's hardly cause for a rocket launch. The real explanation lies in a separate press release.
You see, Rackspace took this opportunity to launch a new brand identity. The company will still be known as Rackspace, but the OpenStack cloud computing service is leaving fingerprints all over the corporate logo, tagline, and marketing messages.
Oh, Rackspace still sells traditional hosting services like its name would suggest. But the "open cloud company," as it now makes itself known, is really all about cloud computing. Never you mind that Amazon.com
At least three analyst firms increased target prices, sales projections, and/or earnings estimates after this one-two punch. Scott Goldman of Goldman Sachs (no relation, I presume) said the bear thesis was mitigated by this quarter's financial results. OpenStack will be more of a long-term growth driver than an instant catalyst, according to Jefferies.
My bullish CAPScall on Rackspace has served me well over the past two years and will continue to pull its weight for years to come. This company is a key cog in the Big Data machine, where cloud-based tools combine to extract value from huge data sets. Learn all about Big Data, including the name of the one company poised to profit the most from this technological revolution, in this special report -- totally free for a limited time.