It's been a busy day for Rackspace Hosting (RAX). The company announced a high-profile storage customer win, while two Wall Street analysts issued buy recommendations on Rackspace and raised their price projections for the stock.
Rackspace said today that hot insta-blogging service Posterous is shifting its storage from Amazon S3 to Rackspace's Cloud Files' service. Posterous had already been using Rackspace-owned SliceHost for its cloud compute needs, and decided to shift its storage as well. Posterous allows users to create blogs in minutes and update their page with text, pictures or video sent directly to an email address.
"We built a dead simple application for everyone – from geeks to soccer moms – to share thoughts, pictures and videos, and we needed a cost effective hosting solution to run it," said Sachin Agarwal, Co-Founder of Posterous. "We had turned to The Rackspace Cloud for affordability, the ability to spin up new servers in seconds, uptime and for Fanatical Support. We’ve been so happy with the service that we have now made the decision to switch to Rackspace Cloud Files, from Amazon’s S3, for our new storage needs."
Meanwhile, securities analysts Srinivas Anantha from Oppenheimer and Colby Synesael from Kauffman Brothers each hikes their rating and target price for Rackspace. Anantha upped his rating to Outperform from Perform, setting a price target of $24, while Synesael lifted his rating to Buy from Hold, and adjusted his price target to $22, from $16. Rackspace shares are priced at $18.73 in midday trading Tuesday on the New York Stock Exchange, up 2 percent on the day. Eric Savitz at Tech Trader Daily has additional details on the analyst activity.
Rackspace said late Monday that it earned $7.6 million, or 6 cents per share, up from $5.2 million, or 4 cents per share, a year ago. Earnings matched the average forecast from analysts polled by Thomson Reuters. Revenue climbed by 17 percent to $162.4 million, topping Wall Street's forecast of $159.1 million. Rackspace said it grew its costumer base by a little more than 10,000 to 80,944.