ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Rackspace Technology's annualizedNet Income for the quarter that ended in Mar. 2026 was $33 Mil.
Rackspace Technology's average Total Assets over the quarter that ended in Mar. 2026 was $2,783 Mil. Therefore, Rackspace Technology's annualized ROA % for the quarter that ended in Mar. 2026 was 1.19%.
The historical rank and industry rank for Rackspace Technology's ROA % or its related term are showing as below:
RXT'
s ROA % Range Over the Past 10 Years
Min: -24 Med: -7.71 Max: -1.65
Current: -5.12
During the past 9 years, Rackspace Technology's highest ROA % was -1.65%. The lowest was -24.00%. And the median was -7.71%.
RXT's ROA % is ranked worse than 68.71% of 2883
companies
in the Software industry
Industry Median: 1.68
vs RXT: -5.12
Rackspace Technology (NAS:RXT) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Infrastructure subindustry, Rackspace Technology's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Rackspace Technology ROA % vs Software Industry
For the Software industry and Technology sector, Rackspace Technology's ROA % distribution charts can be found below:
* The bar in red indicates where Rackspace Technology's ROA % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Mar. 2026) net income data.
ROA % is displayed in the 30-year financial page.
Rackspace Technology (RXT) has a ROA % of 1.19% as of Mar. 2026. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Rackspace Technology and its competitors. According to the industry distribution chart, Rackspace Technology ranks #1981 out of 2883 companies in the Software industry, placing it in the top 68.7%.
Is Rackspace Technology's ROA % too high?
Rackspace Technology's current ROA % is 1.19%. The Software industry median ROA % is 1.68. Rackspace Technology's value of 1.19% is 29.2% below this industry median. Based on the distribution chart, Rackspace Technology ranks #1981 out of 2883 companies in the Software industry, which is below the industry midpoint. Overall, Rackspace Technology has a GF Score™ of 47/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rackspace Technology's ROA % compare to RDWR and GCT?
According to the Software industry distribution chart, Rackspace Technology ranks #1981 out of 2883 companies for ROA %. This places Rackspace Technology in the lower half of its industry. The industry median ROA % is 1.68. Rackspace Technology's value of 1.19% is 29.2% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for a Software company?
The median ROA % among Software companies is 1.68, based on 2,883 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rackspace Technology's current ROA % of 1.19% is 29.2% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Rackspace Technology and its competitors. For the Software industry, the median ROA % is 1.68 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rackspace Technology's current ROA % is 1.19%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Rackspace Technology stock overvalued right now?
Based on GuruFocus' analysis, Rackspace Technology (RXT) is currently considered Significantly Overvalued. The stock's GF Value™ is $1.42, compared to a current price of $6.58 — trading 363% above its estimated fair value. The current ROA % is 1.19% and 29.2% below the Software industry median of 1.68. Rackspace Technology's overall GF Score™ is 47/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For Rackspace Technology (RXT), the current ROA % is 1.19% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Rackspace Technology (RXT) Overvalued in 2026?
Based on GuruFocus' analysis, Rackspace Technology stock appears to be overvalued.
The current stock price of $6.58 is trading 363% above its estimated GF Value™ of $1.42.
GuruFocus considers Rackspace Technology to be Significantly Overvalued.
Key valuation signals for RXT:
ROA %: 1.19%
GF Value™: $1.42 vs. price of $6.58 (363% above fair value)
Industry Position: 29.2% below the Software median (#1981 of 2883)
No single metric tells the full story. See the RXT stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Rackspace Technology Inc is an end-to-end, hybrid, multi-cloud technology services company. It designs, builds, and operates its customers' cloud environments across all technology platforms, irrespective of technology stack or deployment model. The company's solutions include Application Services, Data, Colocation, Cloud, Managed Hosting, Professional Services, and Security and Compliance. It has two reportable segments: Private Cloud and Public Cloud. Maximum revenue is generated from the Public Cloud segment, which offers cloud solutions through managed services, elastic engineering, and professional services offerings for customer environments hosted on the AWS, Microsoft Azure, and Google Cloud public cloud platforms. Geographically, the company derives its key revenue from the U.S.
47GF Score
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