System1 (NYSE:SST – Get Free Report) and Rackspace Technology (NASDAQ:RXT – Get Free Report) are both small-cap business services companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, valuation, dividends and profitability.
Institutional and Insider Ownership
87.5% of System1 shares are owned by institutional investors. Comparatively, 82.5% of Rackspace Technology shares are owned by institutional investors. 14.1% of System1 shares are owned by insiders. Comparatively, 2.0% of Rackspace Technology shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Volatility & Risk
System1 has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500. Comparatively, Rackspace Technology has a beta of 2.04, indicating that its share price is 104% more volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| System1 | 0 | 1 | 0 | 0 | 2.00 |
| Rackspace Technology | 1 | 4 | 1 | 0 | 2.00 |
System1 currently has a consensus price target of $2.00, indicating a potential upside of 204.88%. Rackspace Technology has a consensus price target of $2.47, indicating a potential downside of 16.38%. Given System1’s higher probable upside, equities research analysts clearly believe System1 is more favorable than Rackspace Technology.
Earnings & Valuation
This table compares System1 and Rackspace Technology”s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| System1 | $401.97 million | 0.15 | -$227.22 million | ($1.21) | -0.54 |
| Rackspace Technology | $2.96 billion | 0.23 | -$837.80 million | ($3.49) | -0.85 |
System1 has higher earnings, but lower revenue than Rackspace Technology. Rackspace Technology is trading at a lower price-to-earnings ratio than System1, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares System1 and Rackspace Technology’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| System1 | -24.18% | -68.85% | -18.27% |
| Rackspace Technology | -27.94% | N/A | -1.73% |
Summary
System1 beats Rackspace Technology on 7 of the 13 factors compared between the two stocks.
About System1
System1, Inc. provides omnichannel customer acquisition platform services through its proprietary responsive acquisition marketing platform in the United States, the United Kingdom, Canada, the Netherlands, and internationally. It operates through two segments: Owned and Operated Advertising, and Partner Network. The company engages in the provision of acquiring traffic to its owned and operated websites, as well as revenue-sharing arrangements and related services. It also operates MapQuest, a web-based navigation service that delivers turn-by-turn direction services to users; Info.com, a metasearch engine that consumers can use to search for relevant information; HowStuffWorks, a commercial website focused on helping people solve problems in their daily lives by using various types of digital media to easily breakdown and explain complex concepts, topics, terminology and mechanisms; Startpage, a private search engine that allows users to browse and search the Internet in complete privacy; and CouponFollow for coupon destinations for online shoppers, as well as ActiveBeat and Infospace. In addition, the company provides antivirus software solutions, which offers customers a single packaged solution that provides protection and reporting to the end users. The company is based in Los Angeles, California.
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.
Receive News & Ratings for System1 Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for System1 and related companies with MarketBeat.com's FREE daily email newsletter.
