PubMatic (NASDAQ:PUBM – Get Rating) and Rackspace Technology (NASDAQ:RXT – Get Rating) are both small-cap computer and technology companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, dividends, valuation, profitability, institutional ownership, risk and analyst recommendations.
Analyst Recommendations
This is a breakdown of current ratings and target prices for PubMatic and Rackspace Technology, as reported by MarketBeat.
Get PubMatic alerts:| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| PubMatic | 0 | 2 | 6 | 0 | 2.75 |
| Rackspace Technology | 2 | 7 | 2 | 0 | 2.00 |
PubMatic currently has a consensus target price of $32.75, indicating a potential upside of 101.91%. Rackspace Technology has a consensus target price of $9.20, indicating a potential upside of 81.46%. Given PubMatic's stronger consensus rating and higher probable upside, research analysts plainly believe PubMatic is more favorable than Rackspace Technology.
Institutional & Insider Ownership
42.9% of PubMatic shares are owned by institutional investors. Comparatively, 88.2% of Rackspace Technology shares are owned by institutional investors. 1.2% of PubMatic shares are owned by company insiders. Comparatively, 2.1% of Rackspace Technology shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.Profitability
This table compares PubMatic and Rackspace Technology's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| PubMatic | 21.64% | 19.13% | 9.58% |
| Rackspace Technology | -6.37% | 14.07% | 2.98% |
Risk & Volatility
PubMatic has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500. Comparatively, Rackspace Technology has a beta of 1.06, indicating that its stock price is 6% more volatile than the S&P 500.
Earnings & Valuation
This table compares PubMatic and Rackspace Technology's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| PubMatic | $226.91 million | 3.71 | $56.60 million | $0.96 | 16.90 |
| Rackspace Technology | $3.01 billion | 0.35 | -$218.30 million | ($0.93) | -5.45 |
PubMatic has higher earnings, but lower revenue than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than PubMatic, indicating that it is currently the more affordable of the two stocks.
Summary
PubMatic beats Rackspace Technology on 10 of the 14 factors compared between the two stocks.
About PubMatic
(Get Rating)
PubMatic, Inc. provides a cloud infrastructure platform that enables real-time programmatic advertising transactions for Internet content creators and advertisers worldwide. The company's solutions include Openwrap, a header bidding solution that provides enterprise-grade management and analytics tools; Openwrap OTT, a header bidding management solution for OTT; Openwrap SDK, a header bidding solution for in-app developers; private marketplace solutions; and media buyer consoles. In addition, it offers Real-Time Bidding (RTB) programmatic technologies, which provides various selling options across screens and ad formats; digital advertising inventory quality solutions to detect and filter out invalid traffic and other nefarious activity; Ad quality solutions targeting the reduction of security issues, quality issues, and performance issues; Identity Hub, an identity solution that allows for the use of any advertiser preferred user identifier in a scaled and privacy-compliant fashion; Audience Encore, an audience data platform; and cross-platform video, a sell side platform, which connects trusted video buyers to premium publishers. The company's platform supports an array of ad formats and digital device types, including mobile app, mobile web, desktop, display, video, over-the-top (OTT), connected television, and media. PubMatic, Inc. was incorporated in 2006 and is based in Redwood City, California.
About Rackspace Technology
(Get Rating)
Rackspace Technology, Inc. operates as a multi cloud technology services company worldwide. It operates through Multicloud Services and Apps & Cross Platform segments. The company's Multicloud Services segment provides public and private cloud managed services, which allow customers to determine, manage, and optimize the right infrastructure, platforms, and services; and professional services related to designing and building multi cloud solutions and cloud-native applications. Its Apps & Cross Platform segment includes managed applications; 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.
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