Red Cat (NASDAQ:RCAT) Sets New 12-Month Low - Here's Why

Key Points

• Red Cat shares hit a new 52-week low, touching $3.95 during Wednesday trading after closing at $4.46 the prior session.
• The company’s latest reported quarter missed expectations: it posted an adjusted loss of $0.26 per share versus an expected loss of $0.21, while revenue of $20.2 million fell short of the $22.65 million forecast.
• Insiders sold 375,000 shares worth about $2.63 million over the past 90 days. Analyst sentiment is more positive overall, with a “Moderate Buy” consensus and an average target of $16.29.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price reached a new 52-week low during mid-day trading on Wednesday. The stock traded as low as $3.95 and last traded at $4.0950, with a volume of 4,185,886 shares changing hands. The stock had previously closed at $4.46.

Wall Street Analysts Forecast Growth

Several analysts have weighed in on RCAT shares. Evercore started coverage on Red Cat in a report on Monday, August 31st. They set an "outperform" rating and a $15.00 price objective for the company. Weiss Ratings reiterated a "sell (d-)" rating on shares of Red Cat in a research report on Thursday, October 15th. HC Wainwright reissued a "buy" rating and set a $20.00 price target on shares of Red Cat in a research note on Friday, August 7th. Zacks Research lowered shares of Red Cat from a "hold" rating to a "strong sell" rating in a report on Monday, October 12th. Finally, Wall Street Zen cut shares of Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. Two investment analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating, one has issued a Hold rating and two have assigned a Sell rating to the company's stock. According to MarketBeat.com, Red Cat currently has an average rating of "Moderate Buy" and an average target price of $16.29.

Red Cat Price Performance

The firm has a 50 day simple moving average of $6.49 and a two-hundred day simple moving average of $10.43. The stock has a market cap of $485.93 million, a price-to-earnings ratio of -4.91 and a beta of 1.72.

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

Insider Activity at Red Cat

In other Red Cat news, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $10.63, for a total value of $584,650.00. Following the sale, the director directly owned 489,874 shares in the company, valued at approximately $5,207,360.62. This trade represents a 10.09% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, Director Christopher R. Moe sold 20,000 shares of Red Cat stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $10.51, for a total transaction of $210,200.00. Following the transaction, the director directly owned 200,502 shares in the company, valued at approximately $2,107,276.02. This represents a 9.07% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 375,000 shares of company stock worth $2,632,350. 12.50% of the stock is currently owned by company insiders.

Institutional Trading of Red Cat

Several hedge funds have recently added to or reduced their stakes in the business. Allworth Financial LP acquired a new stake in Red Cat in the 2nd quarter valued at approximately $28,000. Sterling Capital Management LLC grew its stake in shares of Red Cat by 1,063.9% during the 3rd quarter. Sterling Capital Management LLC now owns 4,551 shares of the company's stock worth $29,000 after acquiring an additional 4,160 shares in the last quarter. Parallel Advisors LLC grew its stake in shares of Red Cat by 6,168.8% during the 3rd quarter. Parallel Advisors LLC now owns 4,827 shares of the company's stock worth $31,000 after acquiring an additional 4,750 shares in the last quarter. Fifth Third Bancorp bought a new stake in Red Cat during the 1st quarter worth about $33,000. Finally, NFSG Corp grew its holdings in shares of Red Cat by 200.0% in the 1st quarter. NFSG Corp now owns 3,000 shares of the company's stock valued at $39,000 after acquiring an additional 2,000 shares in the last quarter. Institutional investors and hedge funds own 37.97% of the company's stock.

About Red Cat

Red Cat Holdings, Inc is a drone technology company that develops and provides unmanned aircraft systems, software, and related services for defense, public safety, and commercial applications. Its solutions are designed to support intelligence, surveillance, reconnaissance, and situational-awareness missions in demanding operating environments.

Through its Teal Drones subsidiary, Red Cat offers small unmanned aircraft systems such as the Teal 2, a compact drone designed for nighttime operations and short-range reconnaissance.

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