Red Cat (NASDAQ:RCAT) Stock Bumped Down to "Strong Sell" by Zacks Research

Key Points

• Zacks Research downgraded Red Cat to “strong sell” from “hold,” despite the broader analyst consensus remaining “Moderate Buy” with an average price target of $16.71.
• Red Cat shares opened at $5.18, near their 12-month low of $5.14, after the company missed quarterly estimates with an adjusted loss of $0.26 per share and revenue of $20.2 million versus $22.65 million expected.
• Insiders sold 225,000 shares worth about $1.96 million over the past three months, while institutional ownership increased, including major new or expanded positions from State Street, BlackRock and other investors.

Red Cat (NASDAQ:RCAT - Get Free Report) was downgraded by equities research analysts at Zacks Research from a "hold" rating to a "strong sell" rating in a report issued on Monday, Zacks reports.

RCAT has been the subject of several other reports. Evercore started coverage on shares of Red Cat in a research report on Monday, August 31st. They set an "outperform" rating and a $15.00 target price for the company. Piper Sandler assumed coverage on shares of Red Cat in a research note on Wednesday, September 2nd. They issued a "neutral" rating and a $9.00 price target for the company. Weiss Ratings reissued a "sell (d-)" rating on shares of Red Cat in a report on Friday, July 17th. Wall Street Zen lowered shares of Red Cat from a "sell" rating to a "strong sell" rating in a report on Saturday, July 18th. Finally, HC Wainwright reaffirmed a "buy" rating and set a $20.00 price objective on shares of Red Cat in a report on Friday, August 7th. Two research analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, one has given a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, the stock has an average rating of "Moderate Buy" and an average price target of $16.71.

Red Cat Stock Down 3.9%

NASDAQ:RCAT opened at $5.18 on Monday. The business's 50-day moving average price is $8.01 and its two-hundred day moving average price is $9.79. Red Cat has a twelve month low of $5.14 and a twelve month high of $18.78. The stock has a market cap of $635.79 million, a P/E ratio of -6.40 and a beta of 1.51.

Red Cat (NASDAQ:RCAT - Get Free Report) last issued its quarterly earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.21) by ($0.05). The business had revenue of $20.20 million for the quarter, compared to the consensus estimate of $22.65 million. Red Cat had a negative net margin of 136.26% and a negative return on equity of 32.25%. On average, equities research analysts expect that Red Cat will post -0.79 EPS for the current fiscal year.

Insider Activity at Red Cat

In other Red Cat news, CEO Jeffrey M. Thompson sold 150,000 shares of the company's stock in a transaction that occurred on Tuesday, September 15th. The stock was sold at an average price of $7.74, for a total value of $1,161,000.00. Following the completion of the sale, the chief executive officer owned 11,712,202 shares of the company's stock, valued at $90,652,443.48. This represents a 1.26% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the company's stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $10.63, for a total value of $584,650.00. Following the completion of the sale, the director directly owned 489,874 shares of the company's stock, valued at approximately $5,207,360.62. This represents a 10.09% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 225,000 shares of company stock valued at $1,955,850. Corporate insiders own 12.50% of the company's stock.

Institutional Inflows and Outflows

Several large investors have recently made changes to their positions in RCAT. State Street Corp raised its position in Red Cat by 68.8% in the 2nd quarter. State Street Corp now owns 12,091,447 shares of the company's stock worth $128,774,000 after purchasing an additional 4,928,540 shares during the period. BlackRock Inc. purchased a new stake in Red Cat during the second quarter valued at about $119,610,000. Van ECK Associates Corp purchased a new stake in Red Cat during the second quarter valued at about $27,193,000. Renaissance Technologies LLC bought a new position in shares of Red Cat during the first quarter valued at about $18,533,000. Finally, AWM Investment Company Inc. bought a new position in shares of Red Cat during the second quarter valued at about $9,313,000. 37.97% of the stock is owned by hedge funds and other institutional investors.

About Red Cat

Red Cat Holdings, Inc is a drone technology company that develops and supplies unmanned aircraft systems for defense, government, public safety and commercial applications. The company focuses on autonomous and remotely operated aerial systems designed to support intelligence, surveillance and reconnaissance missions, including operations in contested or GPS-denied environments.

Red Cat's product portfolio includes the Teal 2 small unmanned aircraft system, a compact drone designed for close-range reconnaissance and situational awareness.

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