Red Cat (NASDAQ:RCAT) Stock Falls 2.4% - Here's What Happened

Key Points

• Red Cat shares fell 2.4% to $6.50, with trading volume down 54% from its average. The stock remains below its 50-day and 200-day moving averages of $8.42 and $10.60, respectively.
• Analyst sentiment is mixed but leans positive: Red Cat has a consensus “Moderate Buy” rating and a $16.71 average price target, despite ratings ranging from “strong buy” to “strong sell.”
• The company recently missed quarterly expectations, reporting an adjusted loss of $0.26 per share versus an expected $0.21 loss and revenue of $20.2 million versus an estimated $22.65 million. Insiders sold 225,000 shares worth about $1.96 million over the past 90 days.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s stock price fell 2.4% during trading on Monday. The stock traded as low as $6.46 and last traded at $6.50. 5,987,571 shares traded hands during mid-day trading, a decline of 54% from the average daily volume of 12,984,189 shares. The stock had previously closed at $6.66.

Analyst Ratings Changes

Several equities analysts recently weighed in on the company. Northland Securities set a $13.00 target price on Red Cat in a research report on Thursday, September 17th. Evercore initiated coverage on Red Cat in a research report on Monday, August 31st. They issued an "outperform" rating and a $15.00 price target for the company. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Red Cat in a research note on Friday, July 17th. Needham & Company LLC lowered their price objective on Red Cat from $20.00 to $15.00 and set a "buy" rating on the stock in a research report on Friday, August 7th. Finally, Wall Street Zen downgraded Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. 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 given a Sell rating to the company. According to data from MarketBeat.com, Red Cat presently has a consensus rating of "Moderate Buy" and a consensus target price of $16.71.

Red Cat Stock Performance

The company's 50-day moving average price is $8.42 and its 200 day moving average price is $10.60. The stock has a market capitalization of $797.81 million, a P/E ratio of -8.02 and a beta of 1.35.

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 the consensus estimate of ($0.21) by ($0.05). Red Cat had a negative return on equity of 32.25% and a negative net margin of 136.26%.The firm had revenue of $20.20 million during the quarter, compared to the consensus estimate of $22.65 million. Analysts predict that Red Cat Holdings, Inc. will post -0.79 earnings per share for the current year.

Insider Activity

In related news, CEO Jeffrey M. Thompson sold 150,000 shares of Red Cat 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 sale, the chief executive officer owned 11,712,202 shares of the company's stock, valued at approximately $90,652,443.48. This trade represents a 1.26% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Christopher R. Moe sold 20,000 shares of Red Cat stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $10.51, for a total value of $210,200.00. Following the sale, the director directly owned 200,502 shares in the company, valued at $2,107,276.02. This trade represents a 9.07% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 225,000 shares of company stock worth $1,955,850 over the last ninety days. Corporate insiders own 12.50% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in RCAT. State Street Corp boosted its position in shares of Red Cat by 68.8% during the second quarter. State Street Corp now owns 12,091,447 shares of the company's stock worth $128,774,000 after acquiring an additional 4,928,540 shares during the last quarter. BlackRock Inc. purchased a new stake in shares of Red Cat in the second quarter worth about $119,610,000. Van ECK Associates Corp bought a new position in Red Cat during the second quarter valued at approximately $27,193,000. Renaissance Technologies LLC bought a new position in Red Cat during the first quarter valued at approximately $18,533,000. Finally, CenterBook Partners LP grew its holdings in Red Cat by 1,872.4% during the 4th quarter. CenterBook Partners LP now owns 1,105,132 shares of the company's stock valued at $8,764,000 after buying an additional 1,049,101 shares in the last quarter. 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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