Contrasting Rackspace Hosting (RAX) and IMS Health Holdings (IMS)

IMS Health Holdings (NYSE: IMS) and Rackspace Hosting (NYSE:RAX) are both computer and technology companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, profitabiliy, risk, valuation, earnings and analyst recommendations.

Earnings & Valuation

This table compares IMS Health Holdings and Rackspace Hosting’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
IMS Health Holdings N/A N/A N/A $0.42 74.62
Rackspace Hosting N/A N/A N/A $1.15 27.82

Rackspace Hosting is trading at a lower price-to-earnings ratio than IMS Health Holdings, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

90.3% of IMS Health Holdings shares are owned by institutional investors. Comparatively, 78.0% of Rackspace Hosting shares are owned by institutional investors. 2.5% of IMS Health Holdings shares are owned by company insiders. Comparatively, 15.5% of Rackspace Hosting shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for IMS Health Holdings and Rackspace Hosting, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
IMS Health Holdings 0 0 0 0 N/A
Rackspace Hosting 1 10 2 0 2.08

Rackspace Hosting has a consensus price target of $30.29, indicating a potential downside of 5.33%. Given Rackspace Hosting’s higher possible upside, analysts clearly believe Rackspace Hosting is more favorable than IMS Health Holdings.

Risk and Volatility

IMS Health Holdings has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, Rackspace Hosting has a beta of 1.55, meaning that its stock price is 55% more volatile than the S&P 500.

Profitability

This table compares IMS Health Holdings and Rackspace Hosting’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
IMS Health Holdings 4.45% 30.61% 6.51%
Rackspace Hosting 7.39% 16.80% 8.52%

Summary

Rackspace Hosting beats IMS Health Holdings on 7 of the 9 factors compared between the two stocks.

About IMS Health Holdings

IMS Health Holdings, Inc. (IMS) is an information and technology services company that provides solutions to its clients in the healthcare industry. The Company has its presence in over 100 countries. The Company’s data set contains over 10 petabytes of data and over 500 million patient records. It serves healthcare organizations and life science companies, including pharmaceutical, biotechnology, consumer health and medical device manufacturers, as well as distributors, providers, payers, government agencies, policymakers, researchers and the financial community. The Company’s principal information offerings include national information offerings, sub-national information offerings and OneKey. Its technology services offerings include technology solutions, real-world evidence solutions, and workflow analytics and consulting services. It offers technology services that include data warehousing, information technology (IT) outsourcing, software applications and other services.

About Rackspace Hosting

Rackspace Hosting, Inc. (Rackspace) operates in the managed cloud segment of the business information technology (IT) market. The Company offers a portfolio of integrated IT solutions for common business needs. The Company offers services for certain applications, including e-commerce and Web content management sites, business-productivity applications, such as e-mail and collaboration, and data stores. The Company offers private, public and hybrid clouds in its approximately 10 data centers located on over four continents, in Microsoft Azure and Amazon Web Services data centers, as well as in customer-owned data centers. Its services include dedicated customer care and technical support, such as operating system patching, application monitoring, network and firewall configurations, and identity management. The Company has operations located in multiple cities across the United States, as well as in London, Amsterdam, Zurich, Hong Kong, Sydney and Mexico City.

Receive News & Ratings for IMS Health Holdings Inc Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for IMS Health Holdings Inc and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply