Red Cat (NASDAQ:RCAT) Shares Down 6.4% - Should You Sell?

Key Points

• Red Cat shares fell 6.4% to $8.13, below both the 50-day moving average of $8.90 and the 200-day average of $11.17. Trading volume was 58% below the stock’s average daily volume.
• Analyst sentiment remains broadly positive, with a consensus “Moderate Buy” rating and an average price target of $18.00, though targets range from $15 to $25 and one rating is a sell.
• The company missed quarterly expectations, reporting an adjusted loss of $0.26 per share versus $0.21 expected and revenue of $20.2 million versus $22.65 million expected. Insiders also sold 240,028 shares worth approximately $2.7 million during the last quarter.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) shares fell 6.4% on Wednesday . The company traded as low as $8.11 and last traded at $8.13. 5,514,992 shares were traded during trading, a decline of 58% from the average daily volume of 13,190,999 shares. The stock had previously closed at $8.69.

Wall Street Analyst Weigh In

Several research analysts recently weighed in on RCAT shares. HC Wainwright reissued a "buy" rating and set a $20.00 price target on shares of Red Cat in a research report on Friday, August 7th. Weiss Ratings restated a "sell (d-)" rating on shares of Red Cat in a report on Friday, July 17th. Evercore started coverage on Red Cat in a research note on Monday, August 31st. They issued an "outperform" rating and a $15.00 price target for the company. Roth Capital started coverage on shares of Red Cat in a research note on Monday, June 1st. They set a "buy" rating and a $25.00 price target for the company. Finally, UBS Group started coverage on shares of Red Cat in a research note on Wednesday, May 27th. They set a "buy" rating for the company. Two investment analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, one has issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Red Cat currently has a consensus rating of "Moderate Buy" and an average price target of $18.00.

Red Cat Stock Down 6.4%

The stock's 50 day moving average price is $8.90 and its 200-day moving average price is $11.17. The stock has a market capitalization of $997.89 million, a PE ratio of -10.04 and a beta of 1.35.

Red Cat (NASDAQ:RCAT - Get Free Report) last released 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). 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 during the quarter, compared to the consensus estimate of $22.65 million. On average, analysts forecast that Red Cat Holdings, Inc. will post -0.77 earnings per share for the current year.

Insider Transactions at Red Cat

In other Red Cat news, Director Christopher Moe sold 20,000 shares of the company's stock in a transaction on Tuesday, August 11th. The stock was sold at an average price of $10.51, for a total value of $210,200.00. Following 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 ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Nicholas Liuzza, Jr. sold 55,000 shares of the business's stock in a transaction that occurred 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 completion of the sale, the director owned 489,874 shares of the company's stock, valued at $5,207,360.62. This trade represents a 10.09% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 240,028 shares of company stock worth $2,692,672. Company insiders own 12.50% of the company's stock.

Institutional Trading of Red Cat

Large investors have recently modified their holdings of the business. BlackRock Inc. acquired a new position in Red Cat during the 2nd quarter valued at about $119,610,000. State Street Corp grew its position in Red Cat by 136.4% during the 4th quarter. State Street Corp now owns 6,612,153 shares of the company's stock worth $52,434,000 after acquiring an additional 3,815,310 shares during the last quarter. Van ECK Associates Corp acquired a new position in Red Cat in the second quarter valued at approximately $27,193,000. Vanguard Group Inc. raised its holdings in Red Cat by 43.9% during the 3rd quarter. Vanguard Group Inc. now owns 5,506,377 shares of the company's stock worth $56,991,000 after buying an additional 1,680,929 shares during the period. Finally, Davidson Kempner Capital Management LP acquired a new stake in shares of Red Cat in the third quarter valued at about $17,286,000. 37.97% of the stock is currently owned by institutional investors and hedge funds.

Red Cat Company Profile

Red Cat Holdings, Inc NASDAQ: RCAT is a technology holding company that develops and delivers advanced robotics, autonomy, and sensing solutions for defense, national security, public safety and commercial customers. Headquartered in American Fork, Utah, the company brings together a portfolio of specialized operating businesses focused on unmanned aerial systems (UAS), mission management software, precision mapping sensors and engineering services.

Through its UAS segment, Red Cat designs and manufactures small to medium-sized fixed-wing and vertical-takeoff drones that support intelligence, surveillance and reconnaissance (ISR) missions.

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