Rackspace Technology (NASDAQ:RXT) Trading 6.7% Higher – Still a Buy?

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

Key Headlines Impacting Rackspace Technology

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

• Neutral Sentiment: The multiple law-firm releases largely repeat the same procedural update rather than announce a new corporate development: a class action has been filed and eligible investors may contact counsel or seek appointment as lead plaintiff. Kirby McInerney investor notice
• Negative Sentiment: The lawsuits allege Rackspace and certain executives misled investors about the company’s artificial-intelligence efforts and their effect on financial performance. The core allegation is that Rackspace’s AI pivot could reduce revenue in both cloud segments while investors were not adequately informed. These claims have not been proven. RXT securities-fraud class-action alert
• Negative Sentiment: Several notices state that RXT shares fell 33.6% in a single session on unusually heavy volume after the alleged disclosures, highlighting elevated volatility and investor concern over the company’s AI strategy, revenue outlook and potential litigation costs. Levi and Korsinsky RXT deadline notice
• Negative Sentiment: The concentration of announcements from Kaplan Fox, Pomerantz, Bronstein Gewirtz & Grossman, Portnoy and other firms keeps the alleged disclosure issues in the market’s focus. Although the notices do not establish additional liability, continued litigation could increase legal expenses, management distraction and reputational risk for Rackspace. Kaplan Fox RXT investor notice

Wall Street Analysts Forecast Growth

Several analysts have commented on RXT shares. Weiss Ratings reissued a “sell (d-)” rating on shares of Rackspace Technology in a report on Friday, August 28th. Wall Street Zen downgraded Rackspace Technology from a “hold” rating to a “sell” rating in a research note on Saturday, August 15th. Finally, Royal Bank Of Canada increased their target price on Rackspace Technology from $2.50 to $4.00 and gave the company 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 assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, Rackspace Technology presently has an average rating of “Reduce” and a consensus price target of $4.00.

Rackspace Technology Trading Down 4.3%

The business has a fifty day simple moving average of $3.96 and a two-hundred day simple moving average of $3.68. The company has a market cap of $851.27 million, a PE ratio of -5.14 and a beta of 3.05.

Rackspace Technology (NASDAQ:RXT) last released its earnings results 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 business had revenue of $670.10 million for the quarter, compared to analysts’ expectations of $646.00 million. Equities analysts expect that Rackspace Technology, Inc. will post -0.28 EPS for the current year.

Insider Buying and Selling at Rackspace Technology

In related news, CEO Gajakarnan Kandiah sold 498,728 shares of the company’s stock in a transaction dated Friday, September 4th. The shares were sold at an average price of $3.21, for a total transaction of $1,600,916.88. Following the completion of the sale, the chief executive officer owned 3,684,955 shares of the company’s stock, valued at approximately $11,828,705.55. This represents a 11.92% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible 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, EVP Dharmendra Sinha sold 107,002 shares of the stock in a transaction dated Wednesday, September 2nd. The shares were sold at an average price of $2.95, for a total transaction of $315,655.90. Following the completion of the sale, the executive vice president 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 position. The disclosure for this sale is available in the SEC filing. 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 sold a total of 714,141 shares of company stock worth $2,299,799 in the last 90 days. 2.30% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Rackspace Technology

Institutional investors have recently added to or reduced their stakes in the stock. BlackRock Inc. acquired a new position in Rackspace Technology during the second quarter worth $51,411,000. Jupiter Topco LLC purchased a new position in shares of Rackspace Technology during the 2nd quarter worth $10,462,000. Ieq Capital LLC purchased a new position in shares of Rackspace Technology during the 2nd quarter worth $4,161,000. Mitsubishi UFJ Asset Management Co. Ltd. purchased a new position in shares of Rackspace Technology during the 2nd quarter worth $3,887,000. Finally, Janus Henderson Group PLC boosted its position in shares of Rackspace Technology by 179.7% during the 1st quarter. Janus Henderson Group PLC now owns 2,937,670 shares of the company’s stock valued at $2,878,000 after acquiring an additional 1,887,317 shares during the last quarter. 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 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.