Rackspace Technology (NASDAQ:RXT) Shares Down 6.4% - Should You Sell?

Key Points

• Rackspace Technology shares fell 6.4% to about $3.86, with trading volume sharply below average. The stock has a market capitalization of roughly $985 million and a high beta of 3.10.
• Analyst sentiment is weak: the consensus rating is “Reduce”, with an average price target of $4.00. Recent ratings included sell downgrades, although RBC raised its target from $2.50 to $4.00.
• The company modestly beat quarterly expectations, reporting an adjusted loss of $0.08 per share versus a projected $0.09 loss and revenue of $670.1 million versus $646 million expected. Insiders sold approximately $2.3 million of shares over the past three months, while institutional investors own 82.48% of the stock.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report)'s stock price dropped 6.4% on Monday. The stock traded as low as $3.80 and last traded at $3.8550. Approximately 839,579 shares traded hands during trading, a decline of 96% from the average daily volume of 18,837,201 shares. The stock had previously closed at $4.12.

Analysts Set New Price Targets

Several analysts have recently issued reports on the stock. Weiss Ratings reiterated a "sell (d-)" rating on shares of Rackspace Technology in a research note on Friday, August 28th. Wall Street Zen lowered shares of Rackspace Technology from a "hold" rating to a "sell" rating in a research report on Saturday, August 15th. Finally, Royal Bank Of Canada boosted their price target on shares of Rackspace Technology from $2.50 to $4.00 and gave the stock a "sector perform" rating in a report on Wednesday, June 17th. One analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company has a consensus rating of "Reduce" and an average target price of $4.00.

Rackspace Technology Stock Performance

The stock has a market cap of $985.07 million, a P/E ratio of -5.96 and a beta of 3.10. The business has a 50 day simple moving average of $3.80 and a 200-day simple moving average of $3.84.

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

Insider Transactions at Rackspace Technology

In other news, Director Anthony Scott sold 48,780 shares of the stock in a transaction 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 completion of the transaction, the director owned 180,215 shares in the company, valued at approximately $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 can be accessed through this hyperlink. Also, CFO Mark A. Marino sold 51,373 shares of Rackspace Technology stock in a transaction dated Wednesday, September 2nd. The stock was sold at an average price of $2.95, for a total value of $151,550.35. Following the completion of the sale, the chief financial officer directly owned 2,865,853 shares of the company's stock, valued at approximately $8,454,266.35. This trade represents a 1.76% decrease in their position. 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 a total of 714,141 shares of company stock valued at $2,299,799 in the last three months. 2.30% of the stock is currently owned by company insiders.

Institutional Trading of Rackspace Technology

Institutional investors have recently modified their holdings of the business. BlackRock Inc. purchased a new stake in shares of Rackspace Technology during the second quarter worth $51,411,000. Janus Henderson Group PLC boosted its stake in Rackspace Technology by 179.7% during the first quarter. Janus Henderson Group PLC now owns 2,937,670 shares of the company's stock valued at $2,878,000 after buying an additional 1,887,317 shares during the period. Jupiter Topco LLC purchased a new position in Rackspace Technology during the second quarter worth about $10,462,000. Ieq Capital LLC purchased a new position in Rackspace Technology during the second quarter worth about $4,161,000. Finally, Mitsubishi UFJ Asset Management Co. Ltd. bought a new position in Rackspace Technology in the 2nd quarter worth about $3,887,000. 82.48% of the stock is currently owned by hedge funds and other institutional investors.

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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