Red Cat (NASDAQ:RCAT) Stock Price Down 4% - Time to Sell?

Key Points

• Red Cat shares fell 4% to $8.25 in Tuesday trading, with volume 64% below the average session level. The stock has a $1.01 billion market capitalization and trades below its 50-day and 200-day moving averages.
• Analysts remain broadly optimistic, with an average rating of “Buy” and a consensus price target of $19.50, although Needham lowered its target from $20 to $15 and one firm issued a “Strong Sell” rating.
• Recent results showed pressure on the business: Red Cat missed quarterly EPS and revenue estimates, reported a negative net margin of 136.26%, and insiders sold roughly $2.7 million of shares over the past 90 days.

Shares of Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) traded down 4% during trading on Tuesday . The stock traded as low as $8.20 and last traded at $8.25. 4,776,559 shares were traded during mid-day trading, a decline of 64% from the average session volume of 13,417,096 shares. The stock had previously closed at $8.59.

Analyst Ratings Changes

A number of brokerages have commented on RCAT. UBS Group initiated coverage on shares of Red Cat in a research note on Wednesday, May 27th. They issued a "buy" rating on the stock. Needham & Company LLC reduced their price objective on Red Cat from $20.00 to $15.00 and set a "buy" rating on the stock in a report on Friday, August 7th. Wall Street Zen cut Red Cat from a "sell" rating to a "strong sell" rating in a report on Saturday, July 18th. Roth Capital began coverage on Red Cat in a research note on Monday, June 1st. They set a "buy" rating and a $25.00 price target on the stock. Finally, HC Wainwright restated a "buy" rating and issued a $20.00 price objective on shares of Red Cat in a report on Friday, August 7th. Two research analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating and one has issued a Sell rating to the stock. According to MarketBeat.com, the company currently has an average rating of "Buy" and an average target price of $19.50.

Red Cat Price Performance

The company has a market cap of $1.01 billion, a PE ratio of -10.19 and a beta of 1.32. The business has a fifty day simple moving average of $9.06 and a two-hundred day simple moving average of $11.30.

Red Cat (NASDAQ:RCAT - Get Free Report) last announced its quarterly earnings results 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). The company had revenue of $20.20 million during the quarter, compared to analysts' expectations of $22.65 million. Red Cat had a negative net margin of 136.26% and a negative return on equity of 32.25%. On average, equities research analysts predict that Red Cat Holdings, Inc. will post -0.78 EPS for the current year.

Insider Activity

In other Red Cat news, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the firm'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 directly owned 489,874 shares in the company, valued at $5,207,360.62. This trade represents a 10.09% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Christopher R. 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 transaction, 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. Additional details regarding this sale are available in the official SEC disclosure. In the last ninety days, insiders have sold 240,028 shares of company stock worth $2,692,672. Corporate insiders own 12.50% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in RCAT. Bank of America Corp DE boosted its holdings in Red Cat by 407.0% in the fourth quarter. Bank of America Corp DE now owns 3,397 shares of the company's stock worth $44,000 after acquiring an additional 2,727 shares in the last quarter. Royal Bank of Canada raised its position in shares of Red Cat by 76.4% in the 1st quarter. Royal Bank of Canada now owns 57,800 shares of the company's stock valued at $340,000 after purchasing an additional 25,031 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in Red Cat by 63.6% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 229,259 shares of the company's stock worth $1,348,000 after purchasing an additional 89,095 shares in the last quarter. Goldman Sachs Group Inc. grew its position in Red Cat by 28.7% during the 1st quarter. Goldman Sachs Group Inc. now owns 266,099 shares of the company's stock worth $1,565,000 after purchasing an additional 59,334 shares during the last quarter. Finally, Cetera Investment Advisers acquired a new position in Red Cat during the 2nd quarter valued at approximately $97,000. 37.97% of the stock is currently 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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