Red Cat (NASDAQ:RCAT) Stock Price Down 1.9% - Time to Sell?

Key Points

• Red Cat shares fell 1.9% to $8.93 in mid-day trading, with volume down 72% from the average session. The stock trades below its 50-day and 200-day moving averages of $9.25 and $11.40, respectively.
• Analyst sentiment remains broadly positive, with a consensus “Buy” rating and an average price target of $20.40, although ratings range from “Strong Buy” to “Strong Sell.”
• Recent operating results were weak: Red Cat missed quarterly EPS and revenue estimates, while reporting a negative net margin and return on equity. Insiders also sold 240,028 shares worth approximately $2.7 million during the last quarter.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) was down 1.9% during mid-day trading on Wednesday . The company traded as low as $8.80 and last traded at $8.93. Approximately 3,874,825 shares traded hands during mid-day trading, a decline of 72% from the average session volume of 13,603,139 shares. The stock had previously closed at $9.10.

Analyst Ratings Changes

Several brokerages have recently commented on RCAT. UBS Group initiated coverage on Red Cat in a research note on Wednesday, May 27th. They issued a "buy" rating for the company. Weiss Ratings reiterated a "sell (d-)" rating on shares of Red Cat in a research note on Friday, July 17th. HC Wainwright restated a "buy" rating and set a $20.00 price objective on shares of Red Cat in a report on Friday, August 7th. Wall Street Zen downgraded Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. Finally, Clear Str upgraded Red Cat to a "strong-buy" rating in a research report on Wednesday, April 29th. Two equities research analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, Red Cat currently has a consensus rating of "Buy" and an average price target of $20.40.

Red Cat Price Performance

The business has a 50 day moving average of $9.25 and a 200 day moving average of $11.40. The company has a market cap of $1.10 billion, a PE ratio of -11.02 and a beta of 1.31.

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 (EPS) for the quarter, missing analysts' consensus estimates 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. Sell-side analysts forecast that Red Cat Holdings, Inc. will post -0.78 EPS for the current fiscal year.

Insider Activity

In related news, Director Christopher R. Moe sold 20,000 shares of the business's stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $10.51, for a total transaction of $210,200.00. Following the completion of the sale, the director directly owned 200,502 shares in the company, valued at approximately $2,107,276.02. The trade was a 9.07% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the firm'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 transaction of $584,650.00. Following the sale, 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 position. The disclosure for this sale is available in the SEC filing. Insiders sold 240,028 shares of company stock valued at $2,692,672 in the last quarter. 12.50% of the stock is currently owned by insiders.

Institutional Trading of Red Cat

Large investors have recently made changes to their positions in the stock. BlackRock Inc. purchased a new position in shares of Red Cat in the 2nd quarter valued at $119,610,000. State Street Corp increased its stake in shares of Red Cat by 136.4% in the fourth 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 period. Vanguard Group Inc. raised its stake in shares of Red Cat by 9.0% during the 4th quarter. Vanguard Group Inc. now owns 6,000,037 shares of the company's stock valued at $47,580,000 after buying an additional 493,660 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. Finally, Geode Capital Management LLC boosted its holdings in Red Cat by 13.4% during the fourth quarter. Geode Capital Management LLC now owns 2,520,524 shares of the company's stock worth $19,991,000 after buying an additional 297,967 shares in the last quarter. 37.97% of the stock is owned by hedge funds and other institutional investors.

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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