Rackspace Technology (NASDAQ:RXT) Shares Down 5.1% - Should You Sell?

Key Points

• Rackspace Technology shares fell 5.1% to approximately $2.69, with trading volume substantially below average. The stock remains below its 50-day and 200-day moving averages of $3.63 and $3.99, respectively.
• Analyst sentiment is bearish: ratings include one Hold and one Sell, resulting in an average “Reduce” rating, although the average price target of $4.00 is above the current share price.
• The company modestly exceeded quarterly expectations, reporting an adjusted loss of $0.08 per share versus a $0.09 estimate and revenue of $670.1 million versus $646 million expected. Insiders sold 714,141 shares worth about $2.3 million over the past 90 days, while institutional investors own 82.48% of the stock.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) shares dropped 5.1% during trading on Monday. The company traded as low as $2.71 and last traded at $2.6850. 2,709,365 shares traded hands during trading, a decline of 85% from the average session volume of 18,161,881 shares. The stock had previously closed at $2.83.

Wall Street Analyst Weigh In

RXT has been the topic of several research analyst reports. Wall Street Zen cut shares of Rackspace Technology from a "hold" rating to a "sell" rating in a report on Saturday, August 15th. Weiss Ratings reissued a "sell (d-)" rating on shares of Rackspace Technology in a research note on Friday, August 28th. One investment analyst has rated the stock with a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Reduce" and an average target price of $4.00.

Rackspace Technology Price Performance

The company has a market cap of $684.33 million, a PE ratio of -4.13 and a beta of 3.10. The company has a fifty day moving average price of $3.63 and a 200 day moving average price of $3.99.

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

Insider Activity at Rackspace Technology

In other news, CEO Gajakarnan Kandiah sold 498,728 shares of Rackspace Technology stock in a transaction on Friday, September 4th. The shares were sold at an average price of $3.21, for a total transaction of $1,600,916.88. Following the completion of the sale, the chief executive officer directly owned 3,684,955 shares of the company's stock, valued at approximately $11,828,705.55. The trade was a 11.92% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. 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. Also, EVP Dharmendra Sinha sold 107,002 shares of Rackspace Technology stock in a transaction on Wednesday, September 2nd. The stock was sold at an average price of $2.95, for a total transaction of $315,655.90. Following the sale, the executive vice president directly owned 3,263,429 shares of the company's stock, valued at $9,627,115.55. This represents a 3.17% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 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 sold 714,141 shares of company stock worth $2,299,799 in the last 90 days. 2.30% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors have recently added to or reduced their stakes in RXT. ABS Direct Equity Fund LLC bought a new stake in Rackspace Technology in the 2nd quarter worth approximately $1,306,000. Engineers Gate Manager LP bought a new position in Rackspace Technology during the second quarter valued at approximately $167,000. NewEdge Advisors LLC grew its position in Rackspace Technology by 9,566.7% during the second quarter. NewEdge Advisors LLC now owns 29,000 shares of the company's stock valued at $189,000 after acquiring an additional 28,700 shares during the last quarter. Squarepoint Ops LLC bought a new position in Rackspace Technology during the second quarter valued at approximately $1,839,000. Finally, Corient Private Wealth LP purchased a new position in shares of Rackspace Technology during the second quarter worth approximately $297,000. Institutional investors own 82.48% of the company's stock.

About Rackspace Technology

Rackspace Technology, Inc is a technology services company that helps organizations design, build, operate and modernize cloud-based IT environments. The company supports public, private and hybrid cloud infrastructures, working with major cloud platforms such as Amazon Web Services, Microsoft Azure and Google Cloud.

Its services include managed cloud operations, cloud migration and optimization, application modernization, data and artificial intelligence solutions, cybersecurity, professional services and dedicated hosting.

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