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More on Pac Crest's downgrade of Rackspace (RAX -1.1%): Analyst Michael Bowen gives shares a...

More on Pac Crest's downgrade of Rackspace (RAX -1.1%): Analyst Michael Bowen gives shares a "fair value estimate" of $45, and thinks enterprise OpenStack cloud infrastructure clients "will demand price concessions for larger or longer commitments and compress margins." He also makes note of Rackspace's embrace of tiered pricing for OpenStack services, an element of its recent price cuts.
Comments (1)
  • activistinvestor
    , contributor
    Comments (49) | Send Message
     
    The analyst is failing to mention that IBM is fully committed to open stack and Rackspace is in the pole position on the open stack platform. Sounds like Pac Crest wants your shares cheap before the next run. Notice his play on words $45 "fair value." Every quality stock trades at a premium to it's fair value eventually. He never mentions a target price. RAX will recover into the mid 60's next quarter.
    22 Mar 2013, 07:40 PM Reply Like
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