Red Cat (NASDAQ:RCAT) Shares Climb 1.1% - Here's What Happened

Key Points

• Red Cat shares rose 1.1% to $6.40 in Friday trading, with volume falling 53% below the average session level. The stock remains below its 50-day and 200-day moving averages of $8.29 and $10.34, respectively.
• Analyst sentiment is broadly positive, with a consensus “Moderate Buy” rating and an average price target of $16.71, though individual targets range from $9 to $20.
• The company reported weaker-than-expected quarterly results, including an EPS loss of $0.26 versus the $0.21 expected and revenue of $20.2 million versus $22.65 million forecast. Insiders sold 225,000 shares worth approximately $1.96 million over the past quarter.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price shot up 1.1% on Friday. The company traded as high as $6.59 and last traded at $6.40. Approximately 6,037,542 shares changed hands during mid-day trading, a decline of 53% from the average session volume of 12,846,677 shares. The stock had previously closed at $6.33.

Wall Street Analysts Forecast Growth

RCAT has been the topic of several recent analyst reports. Piper Sandler started coverage on Red Cat in a research report on Wednesday, September 2nd. They set a "neutral" rating and a $9.00 target price on the stock. Northland Securities set a $13.00 price target on Red Cat in a research note on Thursday, September 17th. Wall Street Zen downgraded shares of Red Cat from a "sell" rating to a "strong sell" rating in a report on Saturday, July 18th. HC Wainwright reaffirmed a "buy" rating and issued a $20.00 price objective on shares of Red Cat in a research report on Friday, August 7th. Finally, Evercore began coverage on shares of Red Cat in a research note on Monday, August 31st. They issued an "outperform" rating and a $15.00 target price for the company. Two analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, one has issued a Hold rating and one has issued a Sell rating to the company's stock. According to MarketBeat, the company presently has a consensus rating of "Moderate Buy" and an average price target of $16.71.

Red Cat Trading Up 1.1%

The stock has a 50-day simple moving average of $8.29 and a 200 day simple moving average of $10.34. The company has a market cap of $785.54 million, a price-to-earnings ratio of -7.90 and a beta of 1.52.

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

Insider Activity at Red Cat

In related news, Director Nicholas 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 sale, the director owned 489,874 shares in the company, valued at $5,207,360.62. This represents a 10.09% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CEO Jeffrey Thompson sold 150,000 shares of the firm'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 transaction of $1,161,000.00. Following the transaction, the chief executive officer directly 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. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 225,000 shares of company stock worth $1,955,850 over the last quarter. Insiders own 12.50% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors have recently made changes to their positions in the business. Fifth Third Bancorp acquired a new position in Red Cat during the first quarter valued at $33,000. Allworth Financial LP acquired a new stake in Red Cat during the 2nd quarter worth about $28,000. NFSG Corp grew its position in Red Cat by 200.0% during the 1st quarter. NFSG Corp now owns 3,000 shares of the company's stock worth $39,000 after purchasing an additional 2,000 shares during the period. PNC Financial Services Group Inc. raised its stake in shares of Red Cat by 294.6% during the 1st quarter. PNC Financial Services Group Inc. now owns 3,042 shares of the company's stock valued at $40,000 after buying an additional 2,271 shares during the last quarter. Finally, KBC Group NV purchased a new position in shares of Red Cat during the 1st quarter valued at about $45,000. Hedge funds and other institutional investors own 37.97% of the company's stock.

Red Cat Company Profile

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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