RackSpace (NYSE:RAX) competes in the cloud computing platform markets (Infrastructure-as-a-service & Platform-as-a-Service), offering both managed-cloud and public-cloud hosting services for companies. The company was one of the early leaders in the cloud computing market, but the market has become increasingly competitive in recent years, and I believe it will continue to do so over the next 5 years for a number of reasons. Despite high growth expectations for the end-markets RAX competes in [Infrastructure-as-a-service (IaaS) & Platform-as-a-Service (PaaS), expected to grow by 30% - 40% through 2016], I believe RAX is significantly overvalued relative to the profit opportunities available to the company over the next 5 years, and I believe investors should be selling shares.
1. Increasingly Competitive...
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