Rackspace Technology, Inc. (RXT) vs Sabre Corporation (SABR)

Rackspace Technology, Inc. and Sabre Corporation are both Software Infrastructure companies. Rackspace Technology, Inc. is the larger, with a market value of $1.1B against $908.1M — 1.2× the size. Rackspace Technology, Inc. has negative trailing earnings, so its P/E is not meaningful; Sabre Corporation trades at 1.2×. Sabre Corporation grew revenue faster over the last twelve months: 7.45% against 0.34%. Sabre Corporation has the higher net margin (25.1% vs −5.88%) and the higher return on invested capital (7.89% vs −3.17%). Across the 18 metrics below, Sabre Corporation leads on 14 and Rackspace Technology, Inc. on 4.

Valuation

Metric RXT SABR Software Infrastructure median
P/E n/m 1.20 28.02
P/S 0.37 0.31 3.07
P/B n/m n/m 3.36
Price to free cash flow 24.34 n/m 17.12
EV/EBITDA 14.74 8.79 14.91
EV/Sales 1.49 1.57 3.03
Earnings yield (16.29%) 83.49% 0.13%
Free cash flow yield 4.11% (1.88%) 1.15%

Profitability

Metric RXT SABR Software Infrastructure median
Gross margin 17.92% 31.31% 61.23%
Operating margin (3.26%) 11.34% 0.00%
Net margin (5.88%) 25.14% 0.00%
Free cash flow margin 1.52% (0.57%) 1.67%
Return on equity 13.25% (50.19%) 0.59%
Return on assets (5.64%) 16.32% 0.00%
Return on invested capital (3.17%) 7.89% 0.00%

Growth

Metric RXT SABR Software Infrastructure median
Revenue growth (TTM) 0.34% 7.45% 13.41%
EPS growth (last fiscal year) 75.26% 283.56% —
Revenue growth, 5-year CAGR (0.16%) 15.74% 15.81%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric RXT SABR Software Infrastructure median
Debt to equity (2.44) (4.09) 0.06
Current ratio 0.76 1.02 1.55
Net debt to EBITDA 11.17 7.34 0.08

Dividend

Metric RXT SABR Software Infrastructure median
Dividend yield — 0.48% 1.53%
Payout ratio 0.00 0.00 0.00

Size

Metric RXT SABR Software Infrastructure median
Market cap 1.07b 908.06m 835.96m

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