Rackspace Technology (NASDAQ:RXT) Stock Price Up 6.7% - Should You Buy?

Key Points

• Rackspace Technology shares rose 6.7% to $3.435, although trading volume was 84% below the average session volume.
• Analyst sentiment remains cautious: the stock has an average “Reduce” rating, with one Hold and one Sell rating, despite RBC raising its price target to $4.00.
• The company slightly beat quarterly expectations, reporting an adjusted loss of $0.08 per share and revenue of $670.1 million, while insiders sold approximately $2.3 million of shares in the latest quarter.

Rackspace Technology, Inc. (NASDAQ:RXT - Get Free Report)'s stock price rose 6.7% during mid-day trading on Monday . The company traded as high as $3.47 and last traded at $3.4350. 3,221,432 shares traded hands during trading, a decline of 84% from the average session volume of 19,902,154 shares. The stock had previously closed at $3.22.

Wall Street Analysts Forecast Growth

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

Rackspace Technology Price Performance

The company has a market capitalization of $916.51 million, a P/E ratio of -5.63 and a beta of 3.05. The firm's 50-day moving average is $4.08 and its 200-day moving average is $3.65.

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, beating analysts' consensus estimates of ($0.09) by $0.01. The business had revenue of $670.10 million for the quarter, compared to the consensus estimate of $646.00 million. As a group, analysts forecast that Rackspace Technology, Inc. will post -0.28 EPS for the current fiscal year.

Insider Activity at Rackspace Technology

In other news, EVP Dharmendra Sinha sold 107,002 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 $315,655.90. Following the sale, the executive vice president directly owned 3,263,429 shares of the company's stock, valued at approximately $9,627,115.55. The trade was a 3.17% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed 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, CEO Gajakarnan Kandiah sold 498,728 shares of the business's stock in a transaction dated Friday, September 4th. The stock was sold at an average price of $3.21, for a total value of $1,600,916.88. Following the completion of the sale, the chief executive officer owned 3,684,955 shares in the company, valued at $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. Insiders have sold 714,141 shares of company stock worth $2,299,799 in the last quarter. 2.30% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently modified their holdings of the company. Janus Henderson Group PLC increased its holdings in shares of Rackspace Technology by 179.7% in the 1st quarter. Janus Henderson Group PLC now owns 2,937,670 shares of the company's stock worth $2,878,000 after buying an additional 1,887,317 shares during the last quarter. Renaissance Technologies LLC lifted its holdings in shares of 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 acquiring an additional 250,700 shares during the last quarter. GSA Capital Partners LLP bought a new position in shares of Rackspace Technology in the 2nd quarter valued at about $2,822,000. Mitsubishi UFJ Asset Management Co. Ltd. purchased a new position in Rackspace Technology in the second quarter worth about $3,887,000. Finally, BlackRock Inc. purchased a new position in Rackspace Technology in the second quarter worth about $51,411,000. 82.48% of the stock is currently owned by institutional investors.

Rackspace Technology Company Profile

Rackspace Technology, Inc is a technology services company that helps businesses design, build, operate and optimize information technology environments. Its offerings span public, private and hybrid cloud infrastructure, managed hosting, application services, data services, cybersecurity and professional consulting.

The company supports major cloud platforms, including Amazon Web Services, Microsoft Azure and Google Cloud, and provides services such as cloud migration, modernization, managed operations, application development and infrastructure management.

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