Rackspace Technology heads into its June 18 earnings report with short sellers retreating sharply and the stock down 14% on the week — a combination that makes the positioning story more interesting than the price action alone.
The most striking move this week is in short interest, which collapsed 26% in a single session on June 9, pulling the overall weekly decline to 24%. Short interest now sits at roughly 6.9% of the free float — still meaningful, but down from levels above 9% that prevailed through most of May. That kind of rapid short covering ahead of an earnings date typically reflects either a squeeze, a change in conviction, or both. The borrow market gives some context: cost to borrow has roughly halved from its late-April peak near 9%, now running at 4.2%, which is consistent with lenders seeing reduced demand. Availability has tightened modestly over the week, dropping from 122% to 89%, but that still leaves plenty of room in the lending pool relative to current short positions — no signs of a structural squeeze here.
Options traders are leaning slightly more constructive than their recent habit. The put/call ratio is 0.82, a touch below the 20-day average of 0.86, and almost a standard deviation light on downside hedging. That's a notable contrast with early May, when the PCR was running above 1.9 — roughly double current levels — and bears were paying heavily for protection. The swing from heavily defensive to near-neutral in six weeks mirrors the short covering and suggests sentiment has shifted meaningfully, even as the stock itself has given back ground.
The Street picture is cautious and largely unchanged. Analyst data here requires a caveat: most recent changes are from early 2026 or older, with the most recent being RBC Capital lifting its target to $2.50 in late February. At $4.66, the stock has run well past that target, and the mean consensus target of $4.17 now sits fractionally below the current price. That gap is unusual — it suggests analyst estimates have not kept pace with the stock's recent surge and may be stale relative to what the market is currently pricing. What the Street does agree on is neutral-to-negative ratings across the board, with Barclays maintaining an Underweight. The bull case rests on Private Cloud bookings growing 42% year-over-year and free cash flow improvement in the second half. The bear case points to total revenue still expected to decline about 1% year-over-year, with Public Cloud continuing to contract.
The ORTEX short score is notable context here. It reads 66.9, holding in a tight range all week, and the short score percentile rank sits in just the 7th percentile — meaning RXT ranks among the least-pressured names on short dynamics relative to its universe right now, even with 6.9% of float still short. That low ranking reflects the speed of the recent short exit more than the absolute level of short interest. Meanwhile, the 30-day EPS momentum factor ranks in the 99th percentile — the highest possible reading — pointing to a sharp upward revision cycle in earnings estimates over the past month, which is a plausible explanation for both the short covering and the stock's earlier surge.
Insider activity adds a wrinkle. On June 4, the CEO, CFO, a divisional President, and the HR Director all sold shares, collectively offloading positions at prices between $5.56 and $5.92 — levels well above the current $4.66 close. The net 90-day insider position is technically positive at around 454,000 shares, but that figure is dominated by new grant activity; the recent open-market sales cluster at the top of the recent range reads as routine liquidity rather than conviction buying.
With the next earnings print scheduled for June 18, the question is whether the 30-day EPS momentum upgrade cycle — the single factor score that stands out in this snapshot — will translate into a result that justifies a stock price trading above every current analyst target.
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