Rackspace TechnologyRXT -11.86%45 3-Year ROIIC % is 4.80 as of Dec. 2025, which is 27% below its 10-year median of 6.59. GuruFocus rates RXT with a GF Score™ of 45/100 and a GF Value™ of $1.42 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 2,627 Software companies, Rackspace Technology ranks worse than 51.01% on this metric.
3-Year Return on Invested Incremental Capital (3-Year ROIIC %) measures the change in earnings as a percentage of change in investment over 3-year.
Rackspace Technology's 3-Year ROIIC % for the quarter that ended in Dec. 2025 was 4.80%. High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
The industry rank for Rackspace Technology's 3-Year ROIIC % or its related term are showing as below:
RXT's 3-Year ROIIC % is ranked worse than 51.01% of 2627
companies
in the Software industry
Industry Median: 5.33
vs RXT: 4.80
Return on Incremental Invested Capital (ROIIC) is an extension of Return on Investment Capital (ROIC). ROIC % tells investors how efficiently that profitability is earned per dollar of company capital. ROIIC narrows the focus even further and shows how profitable each additional unit of capital investment could be. ROIIC % is a more powerful metric than ROIC because it measures how much money the company can generate going forward on future capital investments.
High ROIIC is generally an indication that your business is capital efficient or has a higher operating leverage.
Be Aware
It's important to keep in mind that when tracking ROIIC, the metric is better suited to forecasting the trend of future returns rather than measuring current return on investment.
Rackspace Technology 3-Year ROIIC % Related Terms
Rackspace Technology 3-Year ROIIC % Historical Data
* Premium members only.
The historical data trend for Rackspace Technology's 3-Year ROIIC % can be seen below:
* 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 3-Year ROIIC %, along with its competitors' market caps and 3-Year ROIIC % 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 3-Year ROIIC % vs Software Industry
For the Software industry and Technology sector, Rackspace Technology's 3-Year ROIIC % distribution charts can be found below:
* The bar in red indicates where Rackspace Technology's 3-Year ROIIC % falls into.
Rackspace Technology's 3-Year ROIIC % for the quarter that ended in Dec. 2025 is calculated as:
3-Year ROIIC %
=
3-Year Incremental Net Operating Profit After Taxes (NOPAT)**
/
3-Year Incremental Invested Capital**
=
( -100.7 (Dec. 2025) - 1.4344 (Dec. 2022) )
/
( 2629.4 (Dec. 2025) - 4756.4 (Dec. 2022) )
=
-102.1344
/
-2127
=
4.80%***
* 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.
** Annual data of NOPAT and Invested Capital was used to calculate 3-Year ROIIC %.
*** Please be aware that the ROIIC (Return on Invested Capital) calculations are based on company-level data using the primary share class. The calculated data provided is for demonstration purposes and may slightly differ from the results displayed in the title due to potential variations caused by currency exchange rate differences throughout the year.
Rackspace Technology (RXT) has a 3-Year ROIIC % of 4.80 as of Dec. 2025. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Rackspace Technology and its competitors. This is 27% below median its historical median of 6.59. Over the past decade, Rackspace Technology's 3-Year ROIIC % has ranged from 4.80 to 292.26. According to the industry distribution chart, Rackspace Technology ranks #1340 out of 2627 companies in the Software industry, placing it in the top 51%.
Is Rackspace Technology's 3-Year ROIIC % too high?
Rackspace Technology's current 3-Year ROIIC % of 4.80 is 27% below median its 10-year median of 6.59. Over the past 10 years, this metric has ranged from a low of 4.80 to a high of 292.26. The Software industry median 3-Year ROIIC % is 5.33. Rackspace Technology's value of 4.80 is 9.9% below this industry median. Based on the distribution chart, Rackspace Technology ranks #1340 out of 2627 companies in the Software industry, which is below the industry midpoint. Overall, Rackspace Technology has a GF Score™ of 45/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Rackspace Technology's 3-Year ROIIC % compare to AEVA and PRGS?
According to the Software industry distribution chart, Rackspace Technology ranks #1340 out of 2627 companies for 3-Year ROIIC %. This places Rackspace Technology in the lower half of its industry. The industry median 3-Year ROIIC % is 5.33. Rackspace Technology's value of 4.80 is 9.9% below this benchmark. Historically, Rackspace Technology's own 3-Year ROIIC % has ranged from 4.80 to 292.26 over the past decade. While the company's 10-year median is 6.59 vs. the industry median of 5.33, Rackspace Technology has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year ROIIC % for a Software company?
The median 3-Year ROIIC % among Software companies is 5.33, based on 2,627 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year ROIIC % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year ROIIC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Rackspace Technology's current 3-Year ROIIC % of 4.80 is 9.9% 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 3-Year ROIIC % mean?
A high 3-Year ROIIC % can signal that a stock is expensive relative to its fundamentals. 3-Year ROIIC % measures the change in earnings as a percentage of change in investment over 3-year. View historical data on Rackspace Technology and its competitors. For the Software industry, the median 3-Year ROIIC % is 5.33 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Rackspace Technology's current 3-Year ROIIC % is 4.80, which is 27% below median its own 10-year median of 6.59. 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 $5.73 — trading 303.5% above its estimated fair value. The current 3-Year ROIIC % is 4.80, which is 27% below median its 10-year median of 6.59 and 9.9% below the Software industry median of 5.33. Rackspace Technology's overall GF Score™ is 45/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year ROIIC % calculated?
3-Year ROIIC % is calculated from a company's financial statements. For Rackspace Technology (RXT), the current 3-Year ROIIC % is 4.80 as of Dec. 2025. 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 $5.73 is trading 303.5% above its estimated GF Value™ of $1.42.
GuruFocus considers Rackspace Technology to be Significantly Overvalued.
Key valuation signals for RXT:
3-Year ROIIC %: 4.80 (27% below median its 10-year median of 6.59)
GF Value™: $1.42 vs. price of $5.73 (303.5% above fair value)
Industry Position: 9.9% below the Software median (#1340 of 2627)
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.
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