Rackspace Technology (RXT) shares fell 6.14% during premarket trading Friday following the company's fiscal 2026 outlook, which came in below Wall Street expectations. While the infrastructure-as-a-service provider delivered a fourth-quarter earnings-per-share beat, management's forward guidance signaled a significant shift in profitability expectations for the coming fiscal year.
The company projected adjusted EPS of negative 15 to 20 cents for fiscal 2026, sharply contrasting with consensus estimates of positive 1 cent per share. Revenue guidance of $2.6 billion to $2.7 billion also undershot analyst expectations of $2.719 billion, raising concerns about near-term growth trajectories and margin performance. The earnings miss on the guidance side overshadowed the company's Q4 operational performance.
The decline extends Rackspace's recent underperformance relative to its technology sector peers. Over the past 12 months, RXT shares have lagged the broader tech industry by 13.32 percentage points, reflecting investor concerns about the company's competitive positioning and growth prospects in the cloud infrastructure market.