Managed hosting provider Rackspace Hosting (RAX) gained ground on Wall Street Tuesday after Goldman Sachs raised its investment rating on the stock. Shares of Rackspace closed at $8.38, up 96 cents for a gain of 13 percent on the session.
Goldman changed its rating on Rackspace from neutral to “buy,” citing the company’s execution in a difficult environment and efforts to raise raising investor awareness of its accomplishments. “We believe that over the year, investors will give Rackspace more credibility as it executes against its longer-term strategy and contains costs,” the analysts wrote.
Yesterday’s gains came on top of Rackspace’s performance in the first quarter of 2009, when it gained 39.4 percent. Shares of RAX remain below their $12 price from the company’s IPO last August.