Red Cat (NASDAQ:RCAT) Stock Price Down 8.5% - Here's Why

Key Points

• Red Cat shares fell 8.5% to $8.49 during Friday trading, with about 7.1 million shares changing hands.
• The decline followed disappointing quarterly results: Red Cat reported an adjusted loss of $0.26 per share versus expectations of $0.21, while revenue of $20.2 million missed the $22.65 million consensus estimate.
• Needham cut its price target from $20 to $15, while insiders sold 240,028 shares worth approximately $2.69 million over the past 90 days. Despite these concerns, analysts maintain a consensus “Buy” rating with an average $20.40 price target.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price was down 8.5% during mid-day trading on Friday . The company traded as low as $8.45 and last traded at $8.49. Approximately 7,115,263 shares traded hands during trading, a decline of 47% from the average session volume of 13,513,179 shares. The stock had previously closed at $9.28.

Wall Street Analyst Weigh In

Several research analysts have commented on the stock. Needham & Company LLC dropped their price objective on shares of Red Cat from $20.00 to $15.00 and set a "buy" rating for the company in a research note on Friday, August 7th. Weiss Ratings restated a "sell (d-)" rating on shares of Red Cat in a report on Friday, July 17th. LADENBURG THALM/SH SH upgraded shares of Red Cat to a "strong-buy" rating in a report on Wednesday, May 6th. Wall Street Zen cut Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. Finally, Roth Capital initiated coverage on shares of Red Cat in a report on Monday, June 1st. They issued a "buy" rating and a $25.00 price target on the stock. Two investment analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and one has issued a Sell rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Buy" and an average price target of $20.40.

Red Cat Trading Down 8.5%

The business's 50-day simple moving average is $9.16 and its 200-day simple moving average is $11.36. The company has a market capitalization of $1.04 billion, a PE ratio of -10.48 and a beta of 1.31.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported ($0.26) EPS 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 business had revenue of $20.20 million during the quarter, compared to analysts' expectations of $22.65 million. Sell-side analysts forecast that Red Cat Holdings, Inc. will post -0.78 EPS for the current fiscal year.

Insider Transactions at Red Cat

In related news, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of Red Cat stock in a transaction 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 sale, 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 legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Paul Funk II sold 165,028 shares of the business's stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $11.50, for a total transaction of $1,897,822.00. The SEC filing for this sale provides additional information. Insiders have sold a total of 240,028 shares of company stock valued at $2,692,672 in the last ninety days. 12.50% of the stock is currently owned by corporate insiders.

Institutional Trading of Red Cat

Several large investors have recently made changes to their positions in RCAT. BlackRock Inc. purchased a new stake in Red Cat during the 2nd quarter valued at about $119,610,000. State Street Corp raised its position in Red Cat by 136.4% in the fourth quarter. State Street Corp now owns 6,612,153 shares of the company's stock valued at $52,434,000 after purchasing an additional 3,815,310 shares during the period. Vanguard Group Inc. lifted its position in Red Cat by 9.0% in the fourth 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 shares of Red Cat in the 2nd quarter worth approximately $27,193,000. Finally, Geode Capital Management LLC boosted its position in shares of 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 during the period. 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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