Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, hosting and cloud-computing specialist Rackspace Hosting (NYSE: RAX) earned a respected four-star ranking.

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

Rackspace facts

Headquarters (Founded)

San Antonio (1998)

Market Cap

$2.85 billion


Internet software and services

Trailing-12-Month Revenue

$698 million


CEO A. Lanham Napier (since 2006)

CFO Bruce Knooihuizen (since 2008)

Return on Equity (Average, Past 2 Years)


Compound Annual Revenue and Net Income Growth (Over Past 2 Years)

24.1% and 42.8%


$148.5 million / $169.85 million



Microsoft (Nasdaq: MSFT)

Google (Nasdaq: GOOG) (Nasdaq: AMZN)

Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.

On CAPS, 93% of the 397 members who have rated Rackspace believe the stock will outperform the S&P 500 going forward. These bulls include All-Star TMFZahrim (Fool contributor Anders Bylund), who is ranked in the top 10% of our community, and raidoh.

Just last week, TMFZahrim tapped Rackspace as a way to put your money on a winning executive team: "Quality management is of paramount importance to Foolish investing, and Rackspace is certainly doing its part to stay on top of the game."

Rackspace might not be a household name, but it's steadily earning the respect of our community as a leading cloud-computing opportunity. Of course, with the shares trading at a lofty price-to-earnings ratio of 80 -- a massive premium to tech giants like IBM (12.5), Microsoft (12.1), and even the high-priced Amazon (63) -- Rackspace may be getting too much respect from Wall Street at the moment. But as my Foolish colleague Anders recently pointed out, Rackspace's hands-on, dual-segment strategy truly differentiates it from those behemoths, as well as up-and-comers like SAVVIS (Nasdaq: SVVS). If all of Rackspace's customers are as impressed as CAPS member raidoh is, the shares might actually prove to be inexpensive at the moment:

[Rackspace] is a well-regarded player in the web-hosting and remote server industry. I researched the industry for a couple of weeks to host our website and found top recommendations across the net as well as from a web design firm. I found their customer service to be extraordinary -- intelligent, prompt, and accurate. Plus, they're available 24/7 and over many channels (email, IM, phone). I am a huge fan of great customer service.

They have strong inside ownership, a low debt/equity ratio, good earnings growth, and low customer turn-over. This is a growth story, so the P/E will be high.

What do you think about Rackspace, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Rackspace and Google are Motley Fool Rule Breakers picks. Google is also a Motley Fool Inside Value recommendation. Microsoft is an Inside Value choice, and Motley Fool Options has recommended a diagonal call position on it. Amazon is a selection of Stock Advisor. The Fool owns shares of Google, Microsoft, and IBM. Try any of our Foolish newsletter services free for 30 days.

True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Fool's disclosure policy always gets a perfect score.