This is a Scorecard review, revisiting a past LF0 research call against what actually happened.
Ticker: RXT Rating: Sell Published: 2026-09-14 Checkpoint: 2026-10-14 Entry price: $3.49 Latest price: $3.63 as of 2026-10-13 Stock return since entry: +4.0% Signal return: -4.0% Verdict: Incorrect so far
This is the 1-month checkpoint for this call. LF0 publishes monthly Scorecard updates through month 6, using the closest available daily close on or before the checkpoint date.
Read the original LF0 analysis
What I Said
I rated RXT a Sell because I thought the balance sheet would matter more than the hybrid-cloud niche: the company had 12.9x net debt/EBITDA, a 0.8x current ratio, and only modest evidence that growth and margins were improving enough to offset that leverage. I also pointed to the contrast between improving free cash flow and still-weak earnings conversion, and said I would only move closer to Hold if operating margin turned positive and growth reaccelerated.
Peer Comparison
| Company | Return Since Entry |
|---|---|
| RXT (this call) | +4.0% |
| CTSH | -2.5% |
| DOCN | -9.2% |
| DXC | +5.4% |
| EPAM | -7.2% |
| KD | -13.3% |
Why It’s Working (Or Not)
Over this tracking window, following my Sell would have lost money: the stock is up 4.0%, so a short position would be down 4.0% and my call is incorrect so far. That means the market has not rewarded the leverage warning in the way I expected, even though the original thesis was built around the idea that 12.9x net debt/EBITDA and a 0.8x current ratio would keep the equity under pressure. The peer set has been mixed, with several comparables down and a few up, so RXT has not clearly diverged in a way that validates my bearish stance. The specific part of my thesis that has not held up is the assumption that balance-sheet risk would dominate near-term price action.
What Could Still Prove Me Wrong
If RXT can show a sustained move toward positive operating margin and reaccelerating growth, that would directly challenge the reason I wanted to stay bearish. I would also watch whether net debt/EBITDA stays stubbornly above 10x and whether current ratio weakness persists, because those were the leverage risks I said mattered most. If the company keeps generating strong free cash flow but still cannot translate it into better operating profitability, my original concern remains intact; if the opposite happens, I would need to revisit the Sell.
The September 2026 Cohort
Other directional calls published the same month:
| Ticker | Rating | Entry | Latest | Stock Return | Signal Return | Verdict |
|---|---|---|---|---|---|---|
| TLN | Sell | $294.54 | $382.14 | +29.7% | -29.7% | Incorrect so far |
| ASX | Sell | $41.63 | $47.60 | +14.3% | -14.3% | Incorrect so far |
| BORR | Sell | $4.44 | $4.80 | +8.1% | -8.1% | Incorrect so far |
| ATI | Sell | $189.65 | $189.81 | +0.1% | -0.1% | Incorrect so far |
| CCJ | Sell | $88.07 | $86.15 | -2.2% | +2.2% | Correct so far |
| DOCN | Sell | $136.29 | $128.21 | -5.9% | +5.9% | Correct so far |
| ALAB | Sell | $351.31 | $325.41 | -7.4% | +7.4% | Correct so far |
| PL | Sell | $16.42 | $15.16 | -7.7% | +7.7% | Correct so far |
| SIMO | Sell | $269.00 | $246.63 | -8.3% | +8.3% | Correct so far |
| CHTR | Sell | $117.55 | $106.95 | -9.0% | +9.0% | Correct so far |
| ICHR | Sell | $59.42 | $51.57 | -13.2% | +13.2% | Correct so far |
| ACHR | Sell | $5.26 | $4.44 | -15.6% | +15.6% | Correct so far |
| LAR | Sell | $6.70 | $5.00 | -25.4% | +25.4% | Correct so far |
| CUE | Sell | $26.96 | $19.57 | -27.4% | +27.4% | Correct so far |
Live LF0 scorecard: The Scorecard | Research Performance dashboard
Past performance does not guarantee future results. Nothing here is investment advice or a recommendation to buy or sell securities. Returns use LF0’s daily-close scorecard methodology.
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