VeriSign (NASDAQ:VRSN – Get Free Report) and Rackspace Technology (NASDAQ:RXT – Get Free Report) are both technology companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.
Profitability
This table compares VeriSign and Rackspace Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| VeriSign | 49.76% | -39.20% | 58.32% |
| Rackspace Technology | -5.88% | N/A | -1.81% |
Volatility & Risk
VeriSign has a beta of 0.7, indicating that its share price is 30% less volatile than the S&P 500. Comparatively, Rackspace Technology has a beta of 3.05, indicating that its share price is 205% more volatile than the S&P 500.
Valuation & Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| VeriSign | $1.66 billion | 15.96 | $825.70 million | $9.22 | 31.75 |
| Rackspace Technology | $2.69 billion | 0.31 | -$225.80 million | ($0.65) | -4.95 |
VeriSign has higher earnings, but lower revenue than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than VeriSign, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
92.9% of VeriSign shares are held by institutional investors. Comparatively, 82.5% of Rackspace Technology shares are held by institutional investors. 0.6% of VeriSign shares are held by insiders. Comparatively, 2.3% of Rackspace Technology shares are held 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.
Analyst Ratings
This is a summary of recent recommendations and price targets for VeriSign and Rackspace Technology, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| VeriSign | 0 | 1 | 4 | 1 | 3.00 |
| Rackspace Technology | 1 | 1 | 0 | 0 | 1.50 |
VeriSign presently has a consensus target price of $333.00, suggesting a potential upside of 13.76%. Rackspace Technology has a consensus target price of $4.00, suggesting a potential upside of 24.22%. Given Rackspace Technology’s higher possible upside, analysts plainly believe Rackspace Technology is more favorable than VeriSign.
Summary
VeriSign beats Rackspace Technology on 10 of the 15 factors compared between the two stocks.
About VeriSign
VeriSign, Inc., together with its subsidiaries, provides domain name registry services and internet infrastructure that enables internet navigation for various recognized domain names worldwide. The company enables the security, stability, and resiliency of internet infrastructure and services, including providing root zone maintainer services, operating two of thirteen internet root servers; and offering registration services and authoritative resolution for the .com and .net domains, which supports global e-commerce. It operates directory for .name and .cc; and back-end systems for .edu, domain names. VeriSign, Inc. was incorporated in 1995 and is headquartered in Reston, Virginia.
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.
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