Rackspace Technology (NASDAQ:RXT) Stock Falls 8.1% - Should You Sell?

Key Points

• Rackspace Technology shares fell 8.1% to about $2.77 in Friday’s midday trading, on volume reported as 96% below its average.
• Analyst sentiment is cautious: MarketBeat reports a consensus rating of “Reduce” and a $4.00 price target, with one analyst rating the stock Hold and one Sell.
• The company’s latest quarter beat estimates, reporting a loss of $0.06 per share versus expectations of $0.08 and revenue of $609.1 million versus estimates of $574.0 million.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) shares traded down 8.1% during mid-day trading on Friday. The company traded as low as $2.77 and last traded at $2.7650. Approximately 688,863 shares traded hands during mid-day trading, a decline of 96% from the average session volume of 17,062,660 shares. The stock had previously closed at $3.01.

Analyst Ratings Changes

RXT has been the topic of several recent analyst reports. Weiss Ratings reiterated a "sell (d-)" rating on shares of Rackspace Technology in a research note on Friday, August 28th. Wall Street Zen cut shares of 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 data from MarketBeat, Rackspace Technology currently has a consensus rating of "Reduce" and a consensus price target of $4.00.

Rackspace Technology Stock Performance

The business has a 50-day moving average of $3.31 and a 200-day moving average of $3.28. The stock has a market capitalization of $751.01 million, a price-to-earnings ratio of -4.92 and a beta of 3.29.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last released its quarterly earnings results on Monday, November 9th. The company reported ($0.06) EPS for the quarter, topping the consensus estimate of ($0.08) by $0.02. The firm had revenue of $609.10 million for the quarter, compared to analyst estimates of $573.96 million. On average, research analysts predict that Rackspace Technology, Inc. will post -0.28 earnings per share for the current fiscal year.

Insider Buying and Selling at Rackspace Technology

In related news, CEO Gajakarnan Kandiah sold 498,728 shares of the firm's stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $3.21, for a total transaction of $1,600,916.88. Following the transaction, the chief executive officer 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 ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available 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 the business's stock in a transaction dated Wednesday, September 2nd. The shares were sold at an average price of $2.95, for a total value of $315,655.90. Following the completion of the transaction, the executive vice president owned 3,263,429 shares in the company, valued at $9,627,115.55. This trade represents a 3.17% 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. Over the last three months, insiders have sold 665,361 shares of company stock worth $2,092,484. 2.30% of the stock is owned by company insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. Janus Henderson Group PLC lifted its holdings in shares of Rackspace Technology by 179.7% during the first 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 increased its stake in Rackspace Technology by 14.0% in the 1st quarter. Renaissance Technologies LLC now owns 2,041,600 shares of the company's stock valued at $2,000,000 after buying an additional 250,700 shares during the period. GSA Capital Partners LLP acquired a new position in Rackspace Technology in the 2nd quarter valued at $2,822,000. CenterBook Partners LP acquired a new position in Rackspace Technology in the 3rd quarter valued at $7,330,000. Finally, BlackRock Inc. purchased a new position in Rackspace Technology during the 2nd quarter worth $51,411,000. 82.48% of the stock is currently owned by hedge funds and other institutional investors.

Rackspace Technology Company Profile

Rackspace Technology, Inc. NASDAQ: RXT provides multicloud technology services to businesses and public-sector organizations. Its offerings include cloud strategy and migration, infrastructure management, application modernization, data services, and cybersecurity. The company helps customers operate workloads across public cloud platforms, including Amazon Web Services, Microsoft Azure, and Google Cloud, as well as private and hybrid cloud environments. Its services include consulting and ongoing support tailored to customers' technology needs.

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