By David Gross
Yesterday, Pacific Crest downgraded Rackspace (RAX) on valuation concerns. The analyst cited an EV/EBITDA ratio of 10.4 on 2011 estimates as being too high for their liking. Can't say I disagree too strongly. RAX, while being a very-well run company, is up 40% since I wrote this article about them in July.
That said, the analyst also popped in something about the Equinix (EQIX) warning from last week, which is ridiculous. I've never seen a 2% drop in revenue guidance cause so much uproar. What's next, is Obama going to say something about it?