Why Rackspace Is Ready to Rebound

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, Web-hosting company Rackspace Hosting (NYSE: RAX  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Rackspace and see what CAPS investors are saying about the stock right now.

Rackspace facts

Headquarters (founded)

San Antonio, Texas (1998)

Market Cap

$7.1 billion

Industry

Internet software and services

Trailing-12-Month Revenue

$1.3 billion

Management

CEO A. Lanham Napier (since 2006)

Chief Strategy Officer Lewis Moorman IV (since 2011)

Return on Equity (average, past 3 years)

13.7%

Cash/Debt

$292.1 million / $125.4 million

Competitors

AT&T

IBM

Amazon.com

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 94% of the 1,033 members who have rated Rackspace believe the stock will outperform the S&P 500 going forward.

Earlier this year, one of those Fools, Turfscape, offered some solid insight into the Rackspace bull case:

Well-run organization in the right growth industry. The tipping point, though, was seeing how fully-engaged Rackspace employees are. This is a company that instills its culture deep into new hires. People who work at Rackspace appear to believe in the company right down to their core. That type of engagement will drive a strong customer service mindset throughout the organization; which means customers will remain loyal, and spread the gospel of Rackspace to their peers, helping the company to grow even more.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Rackspace may not be your top choice.

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