Nomura Research Institute (OTCMKTS:NRILY) & Rackspace Technology (NASDAQ:RXT) Critical Review

Nomura Research Institute (OTCMKTS:NRILY) and Rackspace Technology (NASDAQ:RXT) are both business services companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation and Earnings

This table compares Nomura Research Institute and Rackspace Technology”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nomura Research Institute	$5.02 billion	4.74	$618.83 million	$1.14	35.93
Rackspace Technology	$2.74 billion	0.11	-$858.20 million	($1.28)	-0.95

Nomura Research Institute has higher revenue and earnings than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than Nomura Research Institute, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Nomura Research Institute has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Rackspace Technology has a beta of 2.06, meaning that its share price is 106% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Nomura Research Institute and Rackspace Technology, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nomura Research Institute	0	1	0	0	2.00
Rackspace Technology	1	3	0	0	1.75

Rackspace Technology has a consensus target price of $1.6333, indicating a potential upside of 33.88%. Given Rackspace Technology’s higher probable upside, analysts plainly believe Rackspace Technology is more favorable than Nomura Research Institute.

Profitability

This table compares Nomura Research Institute and Rackspace Technology’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nomura Research Institute	12.64%	23.20%	10.92%
Rackspace Technology	-10.82%	N/A	-1.55%

Insider and Institutional Ownership

82.5% of Rackspace Technology shares are owned by institutional investors. 61.1% of Nomura Research Institute shares are owned by company insiders. Comparatively, 2.9% of Rackspace Technology shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Summary

Nomura Research Institute beats Rackspace Technology on 10 of the 13 factors compared between the two stocks.

About Nomura Research Institute

Nomura Research Institute, Ltd. provides consulting, financial information technology (IT) solution, industrial IT solution, and IT platform services in Japan and internationally. Its Consulting segment offers management, operational, and system consulting services for enterprises and government agencies. This segment also offers research, future projections, and recommendations to society, economics, business, technology, etc. The company's Financial IT Solutions segment provides system consulting, development, and management solutions, as well as shared online and BPO services for the financial institutions, including the securities, insurance, banking, asset management, and other financial sectors. Its Industrial IT Solutions segment offers system consulting, development, and management solutions, as well as shared online services primarily for the distribution, manufacturing, service, and public sectors. The company's IT Platform Services segment engages in the data center operation activities and construction of IT platforms and networks to the Financial IT and Industrial IT Solutions segments, as well as provides IT platform solutions and information security services to external clients. This segment is also involved in the research related to advance IT, etc. The company was founded in 1965 and is headquartered in Tokyo, Japan.

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.