The historical rank and industry rank for Rackspace Technology's ROE % or its related term are showing as below:
RXT's ROE % is not ranked *
in the Software industry.
Industry Median: 4.73 * Ranked among companies with meaningful ROE % only.
Rackspace Technology (NAS:RXT) ROE % Explanation
ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
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. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their ROE %s can be extremely high.
* 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 ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Software Industry
For the Software industry and Technology sector, Rackspace Technology's ROE % distribution charts can be found below:
* The bar in red indicates where Rackspace Technology's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder equity 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.
ROE % is displayed in the 30-year financial page.
* Note that if the average Total Stockholders Equity is zero or negative, then ROE % would be considered meaningless and hence not be calculated.
Rackspace Technology (RXT) has a ROE % of Negative Equity% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Rackspace Technology and its competitors. According to the industry distribution chart, Rackspace Technology ranks #999999 out of 2681 companies in the Software industry.
Is Rackspace Technology's ROE % too high?
Rackspace Technology's current ROE % is Negative Equity%. Based on the distribution chart, Rackspace Technology ranks #999999 out of 2681 companies in the Software industry, which is in the bottom quartile relative to peers. 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 ROE % compare to RDWR and GCT?
According to the Software industry distribution chart, Rackspace Technology ranks #999999 out of 2681 companies for ROE %. This places Rackspace Technology in the lower half of its industry. The industry median ROE % is 4.73. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROE % for a Software company?
The median ROE % among Software companies is 4.73, based on 2,681 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Rackspace Technology and its competitors. For the Software industry, the median ROE % is 4.73 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rackspace Technology's current ROE % is Negative Equity%. 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 ROE % is Negative Equity%. 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 ROE % calculated?
ROE % is calculated from a company's financial statements. For Rackspace Technology (RXT), the current ROE % is Negative Equity% 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:
ROE %: Negative Equity%
GF Value™: $1.42 vs. price of $6.58 (363% above fair value)
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
Get the complete analysis for RXT
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