Bullish indicating open at $55-$60, IPO prices at $37
SAN ANTONIO—Rackspace Technology, Inc. (NASDAQ:RXT), a cloud computing company with a market capitalization of $425 million, saw its Chief Financial Officer Mark A. Marino recently sell shares in a transaction valued at $37,805. According to an SEC filing, Marino disposed of 20,217 shares of common stock at a weighted average price of $1.87 per share. The transaction comes as the stock has declined over 10% in the past week, though InvestingPro analysis suggests the stock is currently undervalued.
The sales were executed over multiple trades between March 17 and March 19, with prices ranging from $1.75 to $2.13 per share. This transaction was part of a Rule 10b5-1 trading plan, which Marino adopted in September 2023, allowing for the automatic sale of shares to cover tax withholding obligations from the vesting of restricted stock units. InvestingPro analysis reveals the company faces significant financial challenges, with a weak financial health score and rapid cash burn rate. Subscribers can access 11 additional ProTips and comprehensive financial metrics for deeper insights.
Following this transaction, Marino holds 1,917,446 shares of Rackspace Technology, maintaining significant insider ownership as the company navigates through challenging market conditions with a debt-to-capital ratio of 89%.
In other recent news, Rackspace Technology reported its fourth-quarter earnings, surpassing analyst expectations with adjusted earnings per share of -$0.02, compared to the anticipated -$0.04. The company also exceeded revenue forecasts, posting $685.6 million against the consensus of $674.98 million. However, this revenue figure marked a 5% decline from the previous year. Rackspace’s private cloud revenue fell by 6% year-over-year to $269 million, and public cloud revenue decreased by 4% to $417 million. For the full year 2024, total revenue saw a 7% decline, totaling $2.74 billion.
The company provided guidance for the first quarter of 2025, with projected revenue between $653 million and $665 million, aligning closely with the analyst consensus of $659.6 million. Adjusted earnings per share for the same period are expected to range from -$0.07 to -$0.09, in line with the -$0.08 estimate. Despite these figures, investors appeared focused on the ongoing revenue declines, leading to a drop in Rackspace’s share price. The company reported $144 million in cash and cash equivalents as of December 31, 2024, with no outstanding balance on its revolving credit facility.
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