Red Cat (NASDAQ:RCAT) Shares Down 2% - What's Next?

Key Points

• Red Cat shares fell 2% to $6.33, with trading volume down 56% from the average session. The stock remains below its 50-day and 200-day moving averages of $8.33 and $10.40, respectively.
• Analysts maintain a generally positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $16.71, despite target reductions from some firms.
• The company recently missed quarterly expectations, reporting an adjusted loss of $0.26 per share versus the expected $0.21 loss and revenue of $20.20 million versus the $22.65 million consensus. Insiders have sold 225,000 shares worth about $1.96 million over the past 90 days.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) traded down 2% on Thursday. The company traded as low as $6.31 and last traded at $6.33. 5,619,497 shares changed hands during trading, a decline of 56% from the average session volume of 12,875,620 shares. The stock had previously closed at $6.46.

Wall Street Analysts Forecast Growth

Several equities analysts recently commented on RCAT shares. Weiss Ratings restated a "sell (d-)" rating on shares of Red Cat in a research report on Friday, July 17th. Needham & Company LLC cut their price objective on Red Cat from $20.00 to $15.00 and set a "buy" rating for the company in a report on Friday, August 7th. HC Wainwright restated a "buy" rating and issued a $20.00 target price on shares of Red Cat in a research note on Friday, August 7th. Evercore initiated 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. Finally, Northland Securities set a $13.00 price target on shares of Red Cat in a report on Thursday, September 17th. Two research 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 given a Sell rating to the stock. According to MarketBeat, Red Cat currently has an average rating of "Moderate Buy" and a consensus price target of $16.71.

Red Cat Stock Down 2.0%

The stock's 50-day moving average price is $8.33 and its 200-day moving average price is $10.40. The company has a market capitalization of $776.94 million, a price-to-earnings ratio of -7.81 and a beta of 1.35.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its quarterly earnings data 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). The company had revenue of $20.20 million during the quarter, compared to the consensus estimate 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, equities research analysts anticipate that Red Cat Holdings, Inc. will post -0.79 EPS for the current year.

Insider Activity

In other Red Cat news, CEO Jeffrey M. Thompson sold 150,000 shares of the business's stock in a transaction dated 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 completion of the sale, the chief executive officer directly owned 11,712,202 shares of the company's stock, valued at approximately $90,652,443.48. The trade was a 1.26% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed 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 dated Tuesday, August 11th. The shares were sold at an average price of $10.63, for a total transaction of $584,650.00. Following the transaction, the director owned 489,874 shares in the company, valued at approximately $5,207,360.62. The trade was a 10.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 225,000 shares of company stock valued at $1,955,850 over the last 90 days. 12.50% of the stock is owned by company insiders.

Hedge Funds Weigh In On Red Cat

Several large investors have recently bought and sold shares of the business. Allworth Financial LP bought a new stake in shares of Red Cat during the 2nd quarter valued at $28,000. Fifth Third Bancorp acquired a new position in Red Cat in the first quarter valued at about $33,000. NFSG Corp boosted its holdings in Red Cat by 200.0% during the first quarter. NFSG Corp now owns 3,000 shares of the company's stock worth $39,000 after buying an additional 2,000 shares during the last quarter. PNC Financial Services Group Inc. grew its position 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 worth $40,000 after buying an additional 2,271 shares during the period. Finally, Integrated Wealth Concepts LLC bought a new stake in shares of Red Cat in the 2nd quarter valued at about $42,000. 37.97% of the stock is currently owned by institutional investors and hedge funds.

About Red Cat

Red Cat Holdings, Inc is a drone technology company that develops and supplies small unmanned aircraft systems for military, government, public safety and commercial applications. Its solutions are designed to support intelligence, surveillance and reconnaissance, situational awareness, and other missions requiring portable and rapidly deployable aerial systems.

Through its Teal Drones business, Red Cat offers the Teal 2 and related Black Widow systems, compact drones designed for defense and public-safety users.

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