Unsafe At Current Price? – Rackspace Technology Inc. (RXT), VEON Ltd. (VEON)

Rackspace Technology Inc. (NASDAQ: RXT) shares are 28.13% up in the year-to-date (YTD) period and have moved -1.64% or -$0.35 lower in the latest trading session. If we look at the shorter duration, its week performance is 15.01%.

Analyst Recommendations

On August 31, 2020, JP Morgan recommended the RXT stock is a Overweight, while earlier, RBC Capital Mkts had Initiated the stock as a Outperform on August 31, 2020. 0 of the 9 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 9 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $21.00. The forecasts give the Rackspace Technology Inc. stock a price target range of $38.00 on the higher side while at least one analyst think the stock could plunge to a low of $24.00. The two limits represent an upside potential of 44.74% or 12.5%.

Earnings Forecast

Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.23 and $0.25. Wall Street estimates earnings per share to be at an average of $1.13 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 1 over the last 12 months, while SEC filings reveal that there have been 1 insider sales over the same period. Insiders have purchases 142,857 shares while those sold by company executives and officers stand at 22,125. The last 3 months have seen insiders trade a total of 142,857 and 22,125 in purchases and sales respectively.

VEON Ltd. (NASDAQ:VEON), on the other hand, is trading around $1.36 with a market cap of $2.46B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $2.31 and spell out a more modest performance – a 41.13% return. Some analysts are even forecasting $0.21 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the VEON Ltd. (VEON) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

VEON’s operating margin was positive on the trailing 12 months basis, remaining steady at 17.70%, while the operating expenses over the recent quarter were at $1.13 billion. This represented a 40.49% of the company’s total revenues which amounted $1.89 billion. With this in place, we can see that the company’s diluted EPS inclined $0.09 on the year-over-year period, growing to $0.04 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $14.73 billion from $14.42 billion over the previous quarter. Short term investments amounted to $276.0 million while total current assets were at $2.37 billion. The cash flow from operating activities totaled $1.1 billion, significantly lower than the $1.56 billion reported in the year-ago quarter. The company’s free cash flow for the quarter was $212.0 million.

Major holders

Insiders own 39.60% of the company shares, while shares held by institutions stand at 26.40% with a share float percentage of 751.16M. Investors are also buoyed by the number of investors in a company, with VEON Ltd. having a total of 189 institutions that hold shares in the company. The top two institutional holders are TT International Asset Management LTD with over 55.31 million shares worth more than $99.56 million. As of Jun 29, 2020, TT International Asset Management LTD held 3.16% of shares outstanding.

The other major institutional holder is Exor Investments (UK) LLP, with the investment firm holding over 53.11 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $95.61 million and represent 3.04% of shares outstanding.