Rackspace Technology (NASDAQ:RXT) Stock Falls 6% - Time to Sell?

Key Points

• Rackspace Technology shares fell 6% to about $3.67, with trading volume far below its average. The stock remains below its 50-day and 200-day moving averages.
• Analyst sentiment is cautious: the stock has a consensus rating of “Reduce” and a $4.00 price target, with ratings split between Hold and Sell.
• The company exceeded quarterly expectations, reporting adjusted EPS of negative $0.08 versus estimates of negative $0.09 and revenue of $670.1 million versus $646 million expected. Insiders sold shares under pre-arranged plans, while institutional investors own 82.48% of the company.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) traded down 6% during trading on Monday. The stock traded as low as $3.68 and last traded at $3.6650. 648,711 shares changed hands during trading, a decline of 96% from the average daily volume of 18,481,486 shares. The stock had previously closed at $3.90.

Analyst Ratings Changes

A number of research analysts recently weighed in on the company. Weiss Ratings reissued a "sell (d-)" rating on shares of Rackspace Technology in a report on Friday, August 28th. Royal Bank Of Canada raised their price target on Rackspace Technology from $2.50 to $4.00 and gave the company a "sector perform" rating in a report on Wednesday, June 17th. Finally, Wall Street Zen downgraded Rackspace Technology from a "hold" rating to a "sell" rating in a report on Saturday, August 15th. One equities research analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat, the stock has an average rating of "Reduce" and a consensus price target of $4.00.

Rackspace Technology Price Performance

The company's 50-day simple moving average is $3.79 and its 200-day simple moving average is $3.92. The stock has a market capitalization of $944.30 million, a price-to-earnings ratio of -5.70 and a beta of 3.10.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last issued its quarterly earnings data on Monday, August 10th. The company reported ($0.08) earnings per share (EPS) for the quarter, topping analysts' consensus estimates 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. Research analysts expect that Rackspace Technology, Inc. will post -0.28 earnings per share for the current year.

Insider Transactions at Rackspace Technology

In related news, CFO Mark Marino sold 51,373 shares of the business's stock in a transaction on 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 in the company, valued at $8,454,266.35. The trade was a 1.76% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available through the SEC website. 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, CEO Gajakarnan Kandiah sold 498,728 shares of the company'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 completion of the transaction, the chief executive officer directly owned 3,684,955 shares in the company, valued at approximately $11,828,705.55. This represents a 11.92% 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. Over the last quarter, insiders have sold 714,141 shares of company stock valued at $2,299,799. Company insiders own 2.30% of the company's stock.

Institutional Investors Weigh In On Rackspace Technology

A number of institutional investors have recently modified their holdings of the business. ABS Direct Equity Fund LLC acquired a new stake in shares of Rackspace Technology in the second quarter valued at approximately $1,306,000. Engineers Gate Manager LP acquired a new stake in Rackspace Technology during the second quarter worth 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 worth $189,000 after buying an additional 28,700 shares in the last quarter. Squarepoint Ops LLC acquired a new stake in Rackspace Technology during the second quarter worth approximately $1,839,000. Finally, Corient Private Wealth LP bought a new position in Rackspace Technology during the 2nd quarter worth $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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