Red Cat (NASDAQ:RCAT) Shares Down 2.1% - What's Next?

Key Points

• Red Cat shares fell 2.1% to $6.66, with trading volume 56% below the average daily volume. The stock remains below its 50-day and 200-day moving averages of $8.44 and $10.65, respectively.
• Analysts maintain a generally positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $16.71. Recent targets range from $13 to $20, though Needham lowered its target from $20 to $15.
• The company missed quarterly expectations, reporting a loss of $0.26 per share versus the expected $0.21 loss and revenue of $20.2 million versus the $22.65 million estimate. Insiders also sold 225,000 shares worth approximately $1.96 million over the past three months.

Shares of Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) fell 2.1% during trading on Friday. The company traded as low as $6.66 and last traded at $6.66. 5,732,435 shares changed hands during trading, a decline of 56% from the average daily volume of 13,020,315 shares. The stock had previously closed at $6.80.

Analysts Set New Price Targets

A number of analysts recently weighed in on RCAT shares. Evercore initiated coverage on shares of Red Cat in a research report on Monday, August 31st. They issued an "outperform" rating and a $15.00 price objective on the stock. HC Wainwright restated a "buy" rating and set a $20.00 target price on shares of Red Cat in a research report on Friday, August 7th. Needham & Company LLC cut their target price on Red Cat from $20.00 to $15.00 and set a "buy" rating on the stock in a research note on Friday, August 7th. Wall Street Zen downgraded Red Cat from a "sell" rating to a "strong sell" rating in a report on Saturday, July 18th. Finally, Northland Securities set a $13.00 price objective on Red Cat in a research report on Thursday, September 17th. Two research analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, one has given a Hold rating and one has issued a Sell rating to the company's stock. According to data from MarketBeat, the company has an average rating of "Moderate Buy" and an average target price of $16.71.

Red Cat Price Performance

The firm has a market capitalization of $817.45 million, a PE ratio of -8.22 and a beta of 1.35. The stock's 50-day moving average price is $8.44 and its 200 day moving average price is $10.65.

Red Cat (NASDAQ:RCAT - Get Free Report) last issued its earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share for the quarter, missing analysts' consensus estimates 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 the consensus estimate of $22.65 million. Equities research analysts forecast 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 firm'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 of the company's stock, valued at approximately $5,207,360.62. This trade represents a 10.09% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director Christopher R. Moe sold 20,000 shares of the business's stock in a transaction dated Tuesday, August 11th. The shares were sold at an average price of $10.51, for a total transaction of $210,200.00. Following the completion of the sale, the director owned 200,502 shares of the company's stock, valued at approximately $2,107,276.02. This represents a 9.07% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold 225,000 shares of company stock worth $1,955,850 over the last three months. 12.50% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Red Cat

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Fifth Third Bancorp bought a new position in Red Cat in the first quarter worth approximately $33,000. Allworth Financial LP bought a new stake in Red Cat during the 2nd quarter valued at $28,000. NFSG Corp boosted its position in Red Cat by 200.0% during 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. PNC Financial Services Group Inc. increased its holdings in shares of Red Cat by 294.6% in the 1st quarter. PNC Financial Services Group Inc. now owns 3,042 shares of the company's stock valued at $40,000 after acquiring an additional 2,271 shares during the period. Finally, KBC Group NV purchased a new position in shares of Red Cat in the 1st quarter valued at $45,000. 37.97% of the stock is currently owned by institutional investors.

Red Cat Company Profile

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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