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AVGO vs RXT

AVGO
Broadcom Inc.
NEUTRAL
Price
$350.63
Market Cap
$1.66T
Sector
Technology
AI Confidence
85%
RXT
Rackspace Technology, Inc.
BEARISH
Price
$1.47
Market Cap
$363.0M
Sector
Technology
AI Confidence
95%

Valuation

P/E Ratio
AVGO
68.48
RXT
--
Forward P/E
AVGO
19.65
RXT
25.45
P/B Ratio
AVGO
20.79
RXT
-0.3
P/S Ratio
AVGO
24.35
RXT
0.14
EV/EBITDA
AVGO
46.0
RXT
15.23

Profitability

Gross Margin
AVGO
76.73%
RXT
19.22%
Operating Margin
AVGO
44.94%
RXT
-0.79%
Profit Margin
AVGO
36.57%
RXT
-8.41%
ROE
AVGO
33.37%
RXT
--
ROA
AVGO
10.66%
RXT
-1.41%

Growth

Revenue Growth
AVGO
29.5%
RXT
-0.4%
Earnings Growth
AVGO
31.6%
RXT
--

Financial Health

Debt/Equity
AVGO
0.83
RXT
--
Current Ratio
AVGO
1.9
RXT
0.68
Quick Ratio
AVGO
1.67
RXT
0.5

Dividends

Dividend Yield
AVGO
0.74%
RXT
--
Payout Ratio
AVGO
47.17%
RXT
0.0%

AI Verdict

AVGO NEUTRAL

Broadcom exhibits a dichotomy between elite operational performance and poor deterministic value metrics. While the Piotroski F-Score of 4/9 indicates stable health, the stock trades at a massive premium to its Graham Number ($44.08) and Intrinsic Value ($151.04). This valuation gap is partially justified by a very attractive PEG ratio (0.68) and strong forward P/E (19.65), suggesting high growth expectations. However, aggressive insider selling by the CEO and CFO, combined with a bearish technical trend, offsets the strong analyst 'strong_buy' consensus.

Strengths
Exceptional profitability with 76.73% gross margins and 44.94% operating margins
Strong growth trajectory with ~30% YoY increases in both revenue and earnings
Impressive earnings track record with consistent beats over 25 quarters
Risks
Severe overvaluation relative to defensive fair value (Graham Number)
Strong bearish insider sentiment with 14 sell transactions and 0 buys
Technical trend is currently 0/100 (Bearish)
RXT BEARISH

RXT exhibits severe financial distress, anchored by a weak Piotroski F-Score of 2/9 and a negative Price-to-Book ratio (-0.30), which indicates negative shareholder equity. The company faces a liquidity crisis with a current ratio of 0.68 and stagnant revenue growth (-0.40% YoY). While recent earnings have beaten lowered expectations, the long-term trajectory is catastrophic, evidenced by a 94.2% decline over five years. Combined with aggressive insider selling, the deterministic data suggests a high risk of insolvency or further devaluation.

Strengths
Extremely low Price-to-Sales ratio (0.14) suggests the market has already priced in significant failure
Positive gross margin (19.22%) indicates the core service still generates some value
Recent quarterly EPS surprises have been positive, suggesting a narrowing of losses
Risks
Negative shareholder equity (P/B of -0.30) is a critical solvency red flag
Poor liquidity with a current ratio of 0.68 and quick ratio of 0.50
Stagnant to negative revenue growth (-0.40% YoY) indicates a lack of market competitiveness

Compare Another Pair

AVGO vs RXT: Head-to-Head Comparison

This page compares Broadcom Inc. (AVGO) and Rackspace Technology, Inc. (RXT) across key fundamental metrics including valuation ratios, profitability margins, growth rates, financial health indicators, and dividend metrics. Each metric highlights the better-performing stock so you can quickly identify relative strengths and weaknesses.

Our AI engine independently analyzes each company's financials, competitive position, and market conditions to produce a verdict (Bullish, Neutral, or Bearish) along with key strengths and risks. Use this comparison alongside your own research to make informed investment decisions.

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