Rackspace Technology (NASDAQ:RXT) Cut to "Sell" at Wall Street Zen

Key Points

• Wall Street Zen downgraded Rackspace Technology to “Sell” from “Hold.” The broader analyst consensus is “Reduce,” with a target price of $4.00.
• Rackspace reported a quarterly loss of $0.08 per share, narrowly beating estimates, while revenue of $670.1 million exceeded the $646 million consensus.
• Shares opened at $4.21, down 2.1%, amid elevated volatility; the company also faces investor litigation allegations concerning cloud-resale representations and enterprise AI disclosures.

Rackspace Technology (NASDAQ:RXT - Get Free Report) was downgraded by equities researchers at Wall Street Zen from a "hold" rating to a "sell" rating in a note issued to investors on Saturday.

A number of other brokerages have also recently weighed in on RXT. Weiss Ratings reiterated a "sell (d-)" rating on shares of Rackspace Technology in a research report on Tuesday, June 2nd. Royal Bank Of Canada lifted their price objective on Rackspace Technology from $2.50 to $4.00 and gave the company a "sector perform" rating in a report on Wednesday, June 17th. One research analyst has rated the stock with a Hold rating and one has assigned a Sell rating to the company. Based on data from MarketBeat.com, the company currently has a consensus rating of "Reduce" and a consensus target price of $4.00.

Rackspace Technology Stock Down 2.1%

Shares of RXT opened at $4.21 on Friday. The stock has a market cap of $1.07 billion, a price-to-earnings ratio of -6.48 and a beta of 3.05. Rackspace Technology has a 12 month low of $0.39 and a 12 month high of $8.60. The company has a 50-day moving average price of $5.25 and a two-hundred day moving average price of $3.27.

Rackspace Technology (NASDAQ:RXT - Get Free Report) last released its quarterly earnings data on Tuesday, August 11th. The company reported ($0.08) earnings per share for the quarter, beating analysts' consensus estimates of ($0.09) by $0.01. The company had revenue of $670.10 million for the quarter, compared to analyst estimates of $646.00 million. Equities research analysts expect that Rackspace Technology will post -0.28 EPS for the current fiscal year.

Insider Transactions at Rackspace Technology

In other Rackspace Technology news, CFO Mark A. Marino sold 48,099 shares of Rackspace Technology stock in a transaction on Thursday, June 4th. The stock was sold at an average price of $5.56, for a total value of $267,430.44. Following the completion of the transaction, the chief financial officer owned 3,370,431 shares in the company, valued at approximately $18,739,596.36. The trade was a 1.41% decrease in their position. 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. Insiders own 2.30% of the company's stock.

Institutional Trading of Rackspace Technology

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Legal & General Group Plc acquired a new position in Rackspace Technology during the 2nd quarter worth about $58,000. Quantbot Technologies LP bought a new position in shares of Rackspace Technology in the second quarter worth about $63,000. Allworth Financial LP acquired a new position in shares of Rackspace Technology during the second quarter worth approximately $66,000. Strategic Investment Solutions Inc. IL bought a new stake in shares of Rackspace Technology during the second quarter valued at approximately $67,000. Finally, Wealthcare Advisory Partners LLC bought a new stake in shares of Rackspace Technology during the second quarter valued at approximately $72,000. 82.48% of the stock is currently owned by institutional investors and hedge funds.

Rackspace Technology News Roundup

Here are the key news stories impacting Rackspace Technology this week:

• Positive Sentiment: Rackspace reported quarterly revenue of $670.1 million, above the $646 million analyst consensus, while its adjusted loss per share was $0.08 versus estimates of a $0.09 loss. The results initially supported a sharp move higher in the shares. Rackspace Technology Shares Gap Up Following Earnings Beat
• Positive Sentiment: The company appointed Chetan Gupta, Ph.D., as chief AI officer. He will lead Rackspace’s AI strategy, research, governance and customer adoption, with a focus on enterprise, regulated-industry and sovereign AI deployments. The move may strengthen the company’s positioning in a strategically important growth market, although no immediate financial impact was disclosed. Rackspace Technology Appoints Chief AI Officer
• Neutral Sentiment: Multiple law firms are soliciting investors who purchased Rackspace securities from May 7 through July 8, 2026, to seek lead-plaintiff status by September 28, 2026. These releases largely repeat the same lawsuit announcement rather than representing separate new cases. Kaplan Fox Rackspace Investor Notice
• Negative Sentiment: The securities class action alleges that Rackspace and certain executives violated federal securities laws through material misstatements or omissions related to public-cloud resale representations and the company’s enterprise AI efforts. The notices reference a subsequent $125 million reduction in guidance after previously reaffirmed full-year targets. The allegations have not been proven, but the litigation creates legal, reputational and potential financial risks for RXT. SueWallSt Rackspace Class Action Summary

About Rackspace Technology

Rackspace Technology NASDAQ: RXT is a leading provider of managed multi-cloud solutions and services, specializing in the deployment, management and optimization of public and private cloud environments. The company helps organizations design and operate applications across platforms such as Amazon Web Services (AWS), Microsoft Azure, Google Cloud and its own private cloud infrastructure. Rackspace's core offerings include cloud migration, application modernization, data protection, security services and 24x7x365 operational support.

Beyond cloud hosting, Rackspace offers a range of professional services designed to accelerate digital transformation initiatives.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

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