Rackspace Technology (NASDAQ:RXT) Shares Up 13.7% - Here's What Happened

Key Points

• Rackspace shares rose 13.7% to $2.8770 on Monday, while trading volume was 85% below its average.
• Analyst sentiment remained cautious: the consensus rating was “Reduce”, with a $4.00 target price; one analyst rated the stock Hold and one Sell.
• In its latest reported quarter, Rackspace posted a loss of $0.08 per share, slightly better than estimates, and revenue of $670.1 million, above expectations.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) shares were up 13.7% during trading on Monday. The stock traded as high as $2.81 and last traded at $2.8770. 2,596,826 shares changed hands during mid-day trading, a decline of 85% from the average daily volume of 17,205,436 shares. The stock had previously closed at $2.53.

Wall Street Analyst Weigh In

A number of brokerages recently weighed in on RXT. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Rackspace Technology in a research report on Friday, August 28th. Wall Street Zen downgraded shares of Rackspace Technology from a "hold" rating to a "sell" rating in a report on Saturday, August 15th. One research analyst has rated the stock with a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat.com, Rackspace Technology presently has a consensus rating of "Reduce" and a consensus target price of $4.00.

Rackspace Technology Stock Performance

The stock has a market cap of $717.47 million, a PE ratio of -4.33 and a beta of 3.29. The firm has a fifty day moving average price of $3.32 and a 200 day moving average price of $3.24.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last announced its earnings results 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 business had revenue of $670.10 million for the quarter, compared to analysts' expectations of $646.00 million. On average, equities research analysts forecast that Rackspace Technology, Inc. will post -0.28 earnings per share for the current year.

Insider Activity at Rackspace Technology

In related news, CEO Gajakarnan Kandiah sold 498,728 shares of the stock in a transaction that occurred 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 completion of the transaction, the chief executive officer directly owned 3,684,955 shares of the company's stock, valued at $11,828,705.55. This trade represents a 11.92% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. 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 that occurred 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 completion of the sale, the executive vice president owned 3,263,429 shares of the company's stock, valued at $9,627,115.55. This trade represents a 3.17% 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. In the last three months, insiders have sold 714,141 shares of company stock worth $2,299,799. 2.30% of the stock is owned by insiders.

Hedge Funds Weigh In On Rackspace Technology

Several hedge funds have recently made changes to their positions in RXT. Janus Henderson Group PLC grew its stake in shares of Rackspace Technology by 179.7% during the 1st quarter. Janus Henderson Group PLC now owns 2,937,670 shares of the company's stock worth $2,878,000 after purchasing an additional 1,887,317 shares during the period. Renaissance Technologies LLC boosted its holdings in Rackspace Technology by 14.0% during the first quarter. Renaissance Technologies LLC now owns 2,041,600 shares of the company's stock worth $2,000,000 after buying an additional 250,700 shares in the last quarter. GSA Capital Partners LLP acquired a new stake in Rackspace Technology during the second quarter valued at $2,822,000. BlackRock Inc. purchased a new position in Rackspace Technology in the second quarter valued at $51,411,000. Finally, Jupiter Topco LLC purchased a new position in Rackspace Technology in the second quarter valued at $10,462,000. 82.48% of the stock is owned by institutional investors and hedge funds.

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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