Rackspace Technology (NASDAQ:RXT) Shares Climb 10.8% - Should You Buy?

Key Points

• Rackspace shares rose 10.8% in mid-day trading to about $2.62, while trading volume was 79% below its average.
• Analyst sentiment remains cautious: the consensus rating is “Reduce,” with one Hold and one Sell rating and an average price target of $4.00.
• The company beat quarterly estimates, reporting an $0.08-per-share loss versus an expected $0.09 loss and revenue of $670.1 million versus $646 million expected. Insiders have also sold about 714,000 shares over the past 90 days.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) shares shot up 10.8% during mid-day trading on Tuesday. The company traded as high as $2.59 and last traded at $2.6150. 3,733,035 shares traded hands during trading, a decline of 79% from the average session volume of 17,433,563 shares. The stock had previously closed at $2.36.

Analysts Set New Price Targets

Several brokerages recently commented on RXT. Wall Street Zen cut Rackspace Technology from a "hold" rating to a "sell" rating in a research report on Saturday, August 15th. Weiss Ratings reissued a "sell (d-)" rating on shares of Rackspace Technology in a report on Friday, August 28th. One research analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the stock currently has a consensus rating of "Reduce" and an average target price of $4.00.

Rackspace Technology Stock Performance

The company has a market cap of $666.49 million, a price-to-earnings ratio of -3.98 and a beta of 3.10. The company's 50 day moving average price is $3.38 and its 200 day moving average price is $3.21.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last announced its quarterly earnings results on Monday, August 10th. The company reported ($0.08) earnings per share (EPS) for the quarter, beating the consensus estimate of ($0.09) by $0.01. The firm had revenue of $670.10 million for the quarter, compared to the consensus estimate of $646.00 million. As a group, analysts predict that Rackspace Technology, Inc. will post -0.28 EPS for the current year.

Insiders Place Their Bets

In related news, Director Anthony Scott sold 48,780 shares of the stock in a transaction that occurred on Friday, August 14th. The stock was sold at an average price of $4.25, for a total transaction of $207,315.00. Following the sale, the director directly owned 180,215 shares in the company, valued at $765,913.75. This represents a 21.30% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, CEO Gajakarnan Kandiah sold 498,728 shares of the firm's stock in a transaction on Friday, September 4th. The shares were sold at an average price of $3.21, for a total value of $1,600,916.88. Following the sale, the chief executive officer directly owned 3,684,955 shares of the company's stock, valued at $11,828,705.55. This represents a 11.92% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Insiders have sold 714,141 shares of company stock valued at $2,299,799 in the last 90 days. Insiders own 2.30% of the company's stock.

Institutional Inflows and Outflows

A number of institutional investors have recently made changes to their positions in the business. Abel Hall LLC bought a new stake in Rackspace Technology during the 1st quarter worth about $30,000. SG Americas Securities LLC bought a new position in shares of Rackspace Technology in the first quarter worth about $34,000. State of Wyoming bought a new position in shares of Rackspace Technology in the first quarter worth about $35,000. Pictet Asset Management Holding SA acquired a new position in shares of Rackspace Technology during the third quarter worth approximately $45,000. Finally, Legal & General Group Plc acquired a new position in shares of Rackspace Technology during the second quarter worth approximately $58,000. 82.48% of the stock is owned by institutional investors.

Rackspace Technology Company Profile

Rackspace Technology, Inc is a technology services company that helps businesses design, build, operate and optimize information technology environments across public, private and hybrid clouds. Its offerings are intended to support organizations at various stages of cloud adoption, from migration and modernization to ongoing management and optimization.

The company provides managed cloud services for major cloud platforms, including Amazon Web Services, Microsoft Azure and Google Cloud.

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