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Rackspace Technology stock has delivered a very strong run year to date, yet its valuation checks still point to shares screening on the cheap side rather than fully pricing in that move.

• Year to date the share price is up 394.7%, which puts a lot more weight on whether current expectations for the business can hold.

• Investor focus is split between the potential upside from Rackspace Technology's push into enterprise and sovereign AI infrastructure and the valuation risk tied to multiple securities fraud lawsuits linked to its AI shift and reduced revenue outlook.

• On Simply Wall St's broader checklist, Rackspace Technology scores 5 out of 6 on value , which means the stock currently leans cheap across several standard valuation metrics.

The issue now is whether that strong year to date gain still leaves enough valuation support for new investors in Rackspace Technology.

Rackspace Technology delivered 279.5% returns over the last year. See how this stacks up to the rest of the IT industry.

Is Rackspace Technology Still Cheap on Sales?

The P/S multiple is a useful cross check for Rackspace Technology because revenue is still a key reference point while earnings remain negative.

Rackspace Technology trades on a P/S of 0.5x, which sits well below the broader IT industry average of 1.8x and far under the peer average of 13.2x. On Simply Wall St's fair ratio framework, the tailored P/S that might fit the company's size, margins, sector and risk profile is 1.5x. That fair ratio is more than three times the current multiple, which points to a sizeable discount on this metric.

Despite the current securities fraud lawsuits around its AI shift and revenue guidance, the stock still trades at a P/S level that prices it well below both industry and modelled fair benchmarks.

On the P/S multiple, Rackspace Technology stock appears undervalued relative to both sector norms and its own fair ratio.

See what the numbers say about this price — find out in our valuation breakdown.

The Rackspace Technology Narrative: What Would Justify Today's Price?

Simply Wall St Narratives for Rackspace Technology pick up where the valuation puzzle leaves off and set out the future growth, margin and earnings paths that would need to play out for the stock to be worth materially more or less than today's price. All of this is hosted on the company's Community page. Instead of a single output from a ratio or model, they spell out the future that figure relies on so you can watch how those assumptions hold up over time.