Rackspace Technology (NASDAQ:RXT – Get Free Report) and Sangoma Technologies (NASDAQ:SANG – Get Free Report) are both small-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, analyst recommendations, earnings, dividends, institutional ownership and profitability.
Earnings & Valuation
This table compares Rackspace Technology and Sangoma Technologies’ top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Rackspace Technology | $2.96 billion | 0.16 | -$837.80 million | ($3.92) | -0.55 |
| Sangoma Technologies | $252.53 million | 0.44 | -$29.03 million | ($0.93) | -4.95 |
Sangoma Technologies has lower revenue, but higher earnings than Rackspace Technology. Sangoma Technologies is trading at a lower price-to-earnings ratio than Rackspace Technology, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Rackspace Technology | 2 | 4 | 2 | 0 | 2.00 |
| Sangoma Technologies | 0 | 3 | 1 | 0 | 2.25 |
Rackspace Technology presently has a consensus target price of $2.31, indicating a potential upside of 7.49%. Sangoma Technologies has a consensus target price of $4.83, indicating a potential upside of 5.07%. Given Rackspace Technology’s higher probable upside, analysts clearly believe Rackspace Technology is more favorable than Sangoma Technologies.
Profitability
This table compares Rackspace Technology and Sangoma 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% |
| Sangoma Technologies | -12.23% | -3.07% | -1.89% |
Volatility and Risk
Rackspace Technology has a beta of 1.83, meaning that its stock price is 83% more volatile than the S&P 500. Comparatively, Sangoma Technologies has a beta of 1.36, meaning that its stock price is 36% more volatile than the S&P 500.
Institutional & Insider Ownership
82.5% of Rackspace Technology shares are owned by institutional investors. Comparatively, 39.7% of Sangoma Technologies shares are owned by institutional investors. 1.0% of Rackspace Technology shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Summary
Rackspace Technology beats Sangoma Technologies on 8 of the 14 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 Sangoma Technologies
Sangoma Technologies Corporation develops, manufactures, distributes, and supports voice and data connectivity components for software-based communication applications worldwide. The company offers Switchvox, a voice over internet protocol phone system; Switchvox Cloud, a unified communications solution, as well as provides cloud communication solutions. It offers SIP Trunking, a telephone service for one or multiple locations; PBXact Cloud, a centralized internet based solution; Asterisk and FreePBX, an open source IP PBX software; and FAXStation, a fax-over-IP solution. In addition, the company provides desk phone, DECT phones, and headset related products. Further, it offers VoIP gateways, session border controllers, telephony card, and managed service provider services. Sangoma Technologies Corporation was founded in 1984 and is headquartered in Markham, Canada.
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