Forensic Analysis · Technology / Software · as of Jun 27, 2026
Rackspace Technology, Inc. (RXT)
A forensic read on Rackspace Technology, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
F · Poor — capital at risk
Forensic grade
Distress
Financial health
-5.7
Altman Z-score
Clean
Earnings quality
5
Forensic signals
-363.6%
ROE
$1.5B
Market cap
Rackspace Technology, Inc. earns a F (Poor — capital at risk) forensic quality grade, and its Altman Z-score is -5.7, placing it in the Distress zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
-4%Return on invested capital.Return on invested capital is -4% and rising from -12% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+4.3%/yrShare-count dilution.Diluted share count changed +13% over the last 3 years to FY2025 (+4.3%/yr). The count is GROWING — existing holders are being diluted. That's ~4.3% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~13%.
2% of revStock-based comp load.Stock-based compensation ran 2% of revenue and 50% of free cash flow in FY2025 — about $0.19 per diluted share. Heavy — a large slice of 'free cash flow' is really being paid out in stock, so the true owner cash per share is well below the headline.
stoppedShareholder returns — halted.Capital returns have STOPPED — $31M of buybacks + dividends in FY2022, but ~$0 in FY2024. A halt usually means the company is conserving cash; understand why before reading it as neutral.
$2.0BGoodwill impairments.Took $2.0B of goodwill writedowns across 4 year(s) (FY2022 ($534M), FY2023 ($709M), FY2024 ($715M)). Writedowns mean past acquisitions underperformed what was paid for them — worth weighing on capital-allocation skill.
Key fundamentals
Net Margin-8.4%
Free Cash Flow$90.6M
Latest Revenue$2.69B
Revenue Growth YoY-1.9%
Go deeper — free with an account
The forensic grade and screens above are free — no account needed. An account adds the full interactive deep-dive on Rackspace Technology, Inc.:
🔒The written investment read — what the numbers mean, in plain English
🔒Ask anything about RXT's filings — AI Q&A across the 10-K, 10-Qs & 8-Ks
🔒Interactive valuation — reverse-DCF sliders, Monte Carlo & scenario stress
🔒Calibrated 12-month price forecast, with the math shown