Rackspace Technology (NASDAQ:RXT) versus ZW Data Action Technologies (NASDAQ:CNET) Critical Survey

Rackspace Technology (NASDAQ:RXT) and ZW Data Action Technologies (NASDAQ:CNET) are both small-cap business services companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares Rackspace Technology and ZW Data Action Technologies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rackspace Technology	-28.33%	-10.18%	-0.74%
ZW Data Action Technologies	-28.87%	-81.34%	-48.92%

Earnings and Valuation

This table compares Rackspace Technology and ZW Data Action Technologies’ revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rackspace Technology	$2.96 billion	0.14	-$837.80 million	($3.92)	-0.46
ZW Data Action Technologies	$26.24 million	0.23	-$9.79 million	N/A	N/A

ZW Data Action Technologies has lower revenue, but higher earnings than Rackspace Technology.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Rackspace Technology and ZW Data Action Technologies, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rackspace Technology	2	4	2	0	2.00
ZW Data Action Technologies	0	0	0	0	N/A

Rackspace Technology currently has a consensus target price of $2.31, suggesting a potential upside of 27.69%. Given Rackspace Technology’s higher probable upside, analysts plainly believe Rackspace Technology is more favorable than ZW Data Action Technologies.

Volatility and Risk

Rackspace Technology has a beta of 1.83, indicating that its share price is 83% more volatile than the S&P 500. Comparatively, ZW Data Action Technologies has a beta of 0.67, indicating that its share price is 33% less volatile than the S&P 500.

Insider and Institutional Ownership

82.5% of Rackspace Technology shares are owned by institutional investors. Comparatively, 0.0% of ZW Data Action Technologies shares are owned by institutional investors. 1.0% of Rackspace Technology shares are owned by insiders. Comparatively, 17.7% of ZW Data Action Technologies shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Rackspace Technology beats ZW Data Action Technologies on 8 of the 11 factors compared between the two stocks.

About Rackspace Technology

Rackspace Technology, Inc. operates as a multi cloud technology services company in the Americas, Europe, the Middle East, Africa, and The Asia-Pacific region. It operates through three segments: Multicloud Services, Apps & Cross Platform, and OpenStack Public Cloud. The company provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; professional services related to designing and building multi cloud solutions and cloud-native applications; and managed hosting and colocation services. It also helps customers establish governance, operational, and architectural frameworks to mitigate risks and reduce inefficiencies to manage costs, achieve industry-specific compliance objectives, and enhance security. In addition, the company offers managed applications, including running large-scale SaaS applications for customers on its and public cloud infrastructure; managed security services in the areas of security threat assessment and prevention, threat detection and response, rapid remediation, governance, and risk and compliance assistance across multiple cloud platforms, as well as privacy and data protection services, including detailed access restrictions and reporting; data services; and professional services related to designing and implementing application, security, and data services. Rackspace Technology, Inc. was founded in 1998 and is headquartered in San Antonio, Texas.

About ZW Data Action Technologies

ZW Data Action Technologies Inc., through its subsidiaries, provides omni-channel advertising, precision marketing, and data analysis management systems in the People's Republic of China. It offers Internet advertising, precision marketing, and related data services to small and medium enterprises through its Internet portals, including 28.com and liansuo.com that provide advertisers with tools to build sales channels in the form of franchisees, sales agents, distributors, and/or resellers. The company also develops and operates blockchain technology-based products and services, as well as blockchain-based SaaS services to provide one-stop blockchain-powered enterprise management solutions in forms of NFT generations, data record, share and storage modules subscriptions, etc. In addition, it provides other e-commerce online to offline advertising and marketing, and related value-added technical services. The company was formerly known as ChinaNet Online Holdings, Inc. and changed its name to ZW Data Action Technologies Inc. in October 2020. ZW Data Action Technologies Inc. was founded in 2003 and is based in Beijing, the People's Republic of China.