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What: Shares of Rackspace Hosting
So what: Revenue rose 32% year-over-year to $247.2 million as Rackspace added more than 10,000 customers and 3,500 servers during the quarter. Profits improved 62.5% to $0.13 a share. Analysts were expecting $0.12 a share on $241.3 million in revenue, according to data compiled by Yahoo! Finance.
Now what: Call it just another great performance for Rackspace, which has now seen year-over-year revenue growth accelerate for three consecutive quarters. Or maybe call it a buying opportunity. Sure, the stock trades for 46 times next year’s consensus earnings estimate, but efficient growers like Rackspace almost never trade on the cheap. Do you agree? Disagree? Weigh in using the comments box below.
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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
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