Rackspace Technology (NASDAQ:RXT) Stock Jumps 6.2% - Here's What Happened

Key Points

• Rackspace Technology shares rose 6.2% to $3.8450 in mid-day trading, although volume was 96% below the stock’s average daily volume.
• Analyst sentiment remains cautious: the consensus rating is “Reduce” with a $4.00 price target, while recent ratings included downgrades to “sell” and a “sector perform” rating from RBC.
• The company exceeded quarterly expectations, reporting an adjusted loss of $0.08 per share versus estimates of $0.09 and revenue of $670.1 million versus forecasts of $646 million. Insiders have nevertheless sold 714,141 shares worth about $2.3 million over the past 90 days.

Shares of Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report) traded up 6.2% during mid-day trading on Friday. The company traded as high as $3.84 and last traded at $3.8450. 805,112 shares traded hands during trading, a decline of 96% from the average daily volume of 18,552,855 shares. The stock had previously closed at $3.62.

Analyst Upgrades and Downgrades

Several research analysts have recently weighed in on the company. Wall Street Zen downgraded Rackspace Technology from a "hold" rating to a "sell" rating in a research note on Saturday, August 15th. Weiss Ratings restated a "sell (d-)" rating on shares of Rackspace Technology in a research report on Friday, August 28th. 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 research report on Wednesday, June 17th. One research analyst has rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, Rackspace Technology currently has a consensus rating of "Reduce" and a consensus price target of $4.00.

Rackspace Technology Trading Up 7.9%

The business has a fifty day moving average price of $3.79 and a two-hundred day moving average price of $3.90. The firm has a market capitalization of $995.28 million, a PE ratio of -6.01 and a beta of 3.10.

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 company had revenue of $670.10 million for the quarter, compared to analysts' expectations of $646.00 million. On average, equities analysts forecast that Rackspace Technology, Inc. will post -0.28 earnings per share for the current fiscal year.

Insider Transactions at Rackspace Technology

In other news, EVP Dharmendra Sinha sold 107,002 shares of the firm's stock in a transaction that occurred on 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 of the company's stock, valued at approximately $9,627,115.55. This trade represents a 3.17% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which can be accessed 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, Director Anthony Scott sold 48,780 shares of the stock in a transaction dated Friday, August 14th. The shares were sold at an average price of $4.25, for a total value of $207,315.00. Following the completion of the sale, the director directly owned 180,215 shares in the company, valued at $765,913.75. This represents a 21.30% decrease in their position. The disclosure for this sale is available in the SEC filing. In the last 90 days, insiders sold 714,141 shares of company stock valued at $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 the company. Abel Hall LLC purchased a new stake in Rackspace Technology in the first quarter valued at approximately $30,000. SG Americas Securities LLC acquired a new position in shares of Rackspace Technology in the 1st quarter valued at $34,000. State of Wyoming acquired a new stake in shares of Rackspace Technology during the first quarter worth about $35,000. Legal & General Group Plc purchased a new stake in Rackspace Technology during the 2nd quarter valued at approximately $58,000. Finally, Quantbot Technologies LP purchased a new position in shares of Rackspace Technology in the 2nd quarter valued at approximately $63,000. Hedge funds and other 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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