Rackspace Technology, Inc.'s (NASDAQ:RXT) Chief Human Resources Officer, Kellie Teal-Guess, has recently sold a portion of her company stock, according to a new SEC filing. The transaction, which took place on May 16, 2024, involved the sale of 61,393 shares at a price of $2.13 per share, totaling over $130,767.
The sale was executed as a "sell to cover" transaction, a common practice used by executives to satisfy tax withholding obligations that arise upon the vesting of restricted stock units (RSUs). Notably, the shares sold were part of a pre-arranged Rule 10b5-1 trading plan, which allows company insiders to set up a predetermined plan to sell stocks at a time when they are not in possession of material non-public information.
Teal-Guess's recent transaction followed the vesting of RSUs that were granted to her as part of her compensation package. These RSUs are set to vest in quarterly installments over a three-year period, each unit representing the right to receive one share of Rackspace Technology's common stock upon settlement.
In addition to the sale, the SEC filing also disclosed that on the same day, Teal-Guess acquired 500 shares through the company's Employee Stock Purchase Plan (ESPP), a program that allows employees to purchase company stock, often at a discount. This acquisition is exempt under Rule 16b-3(c), which pertains to transactions between an issuer and its officers or directors.
Following these transactions, Teal-Guess's ownership in the company stands at 909,775 shares of common stock, reflecting her continued investment in Rackspace Technology's future.
Investors often monitor insider transactions as they can provide insights into an executive's view of the company's prospects. However, it's important to note that selling activity may not always indicate a lack of confidence in the company, as it can be motivated by a variety of personal financial considerations.
InvestingPro Insights
Recent market data from InvestingPro provides a nuanced perspective on Rackspace Technology, Inc. (NASDAQ:RXT), which could be of interest to investors following the insider transaction by Chief Human Resources Officer, Kellie Teal-Guess. As of the latest metrics, Rackspace Technology has a market capitalization of $483.52 million and a negative price-to-earnings (P/E) ratio, indicating that the company is not currently profitable. Specifically, the P/E ratio stands at -0.55, with an adjusted P/E ratio for the last twelve months as of Q1 2024 at -1.36.
Despite the recent insider sale, the company's stock price has experienced significant movements over the past months. One of the InvestingPro Tips suggests that the stock is in overbought territory, as indicated by the Relative Strength Index (RSI), which could be a point of caution for potential investors. Additionally, Rackspace has seen a large price uptick of 60.0% over the last six months, with a strong return of 91.15% over the last year.
On the financial health side, the company's revenue for the last twelve months as of Q1 2024 stands at $2.89 billion, with a gross profit of $611.9 million. However, the gross profit margin is considered weak at 21.18%. Another InvestingPro Tip points out that analysts anticipate a sales decline in the current year, which is corroborated by a revenue growth figure of -6.97% for the same period.
For those seeking deeper insights and additional metrics on Rackspace Technology, Inc., there are more InvestingPro Tips available on the platform. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, which includes access to a comprehensive list of tips to inform their investment decisions.
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