Rackspace Technology (NASDAQ:RXT) versus CEVA (NASDAQ:CEVA) Head-To-Head Comparison

Rackspace Technology (NASDAQ:RXT) and CEVA (NASDAQ:CEVA) are both small-cap business services companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Risk & Volatility

Rackspace Technology has a beta of 1.98, meaning that its stock price is 98% more volatile than the S&P 500. Comparatively, CEVA has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Profitability

This table compares Rackspace Technology and CEVA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rackspace Technology	-29.99%	N/A	-1.28%
CEVA	-12.91%	-5.70%	-4.94%

Institutional and Insider Ownership

82.5% of Rackspace Technology shares are owned by institutional investors. Comparatively, 85.4% of CEVA shares are owned by institutional investors. 1.0% of Rackspace Technology shares are owned by company insiders. Comparatively, 2.4% of CEVA shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Rackspace Technology and CEVA’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rackspace Technology	$2.96 billion	0.19	-$837.80 million	($3.96)	-0.64
CEVA	$97.42 million	4.92	-$11.88 million	($0.53)	-38.36

CEVA has lower revenue, but higher earnings than Rackspace Technology. CEVA is trading at a lower price-to-earnings ratio than Rackspace Technology, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Rackspace Technology and CEVA, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rackspace Technology	2	4	2	0	2.00
CEVA	0	2	4	0	2.67

Rackspace Technology presently has a consensus price target of $2.31, indicating a potential downside of 9.37%. CEVA has a consensus price target of $27.00, indicating a potential upside of 32.81%. Given CEVA’s stronger consensus rating and higher probable upside, analysts plainly believe CEVA is more favorable than Rackspace Technology.

Summary

CEVA beats Rackspace Technology on 9 of the 14 factors compared between the two stocks.

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.

About CEVA

CEVA, Inc. provides silicon and software IP solutions to semiconductor and original equipment manufacturer (OEM) companies worldwide. Its 5G mobile and infrastructure products include Ceva-XC vector digital signal processors (DSPs) for 5G handsets, 5G RAN, and general-purpose baseband processing; PentaG-RAN, an open ran platform for base station and radio; and PentaG2 – 5G NR modem platform for UE, as well as for non-handset 5G vertical markets, such as fixed wireless access, industry 4.0, robotics, and AR/VR devices. The company's wireless IoT products comprise RivieraWaves' Bluetooth 5dual mode and low energy platforms, RivieraWaves' Wi-Fi platforms, ultra-wide band platforms, and Cellular IoT and RedCap platforms, as well as sense and inference processors and platforms consist of NeuPro-M neural processing unit (NPU) family; SensPro2 sensor hub AI platforms addressing imaging, vision, powertrain, and applications, including DSP processors, AI accelerators, and a software portfolio; and Ceva-BX1 and Ceva-BX2 audio AI DSPs. Its sensing and audio software comprise RealSpace spatial audio software package; WhisPro speech recognition; ClearVox, a voice front-end software package for voice-enabled devices; and CDNN, a neural network graph compiler that enables AI developers to automatically compile, optimize, and run pre-trained networks onto embedded devices. The company's application software IP are licensed primarily to OEMs who embed it in their system on chip designs. It delivers AI DSPs and NPUs in the form of a hardware description language definition; and offers development platforms, software development kits, and software debug tools, which facilitate system design, debug, and software development. The company licenses its technology through a direct sales force. CEVA, Inc. was formerly known as ParthusCeva, Inc. and changed its name to CEVA, Inc. in December 2003. The company was incorporated in 1999 and is headquartered in Rockville, Maryland.