Red Cat (NASDAQ:RCAT) Trading 3.9% Higher - Still a Buy?

Key Points

• Red Cat shares rose 3.9% to $8.70 on Tuesday, with trading volume below its daily average. The company’s market capitalization is approximately $1.07 billion.
• Analyst sentiment is broadly positive, with a “Moderate Buy” consensus and an average price target of $18.00, although targets range from $15 to $25 and one analyst maintains a sell rating.
• Red Cat’s latest quarterly results fell short of expectations, reporting an adjusted loss of $0.26 per share versus estimates of $0.21 and revenue of $20.2 million versus $22.65 million expected. Insiders also sold roughly 240,028 shares worth $2.69 million over the past quarter.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price shot up 3.9% during trading on Tuesday . The company traded as high as $8.91 and last traded at $8.70. Approximately 5,467,460 shares were traded during trading, a decline of 59% from the average daily volume of 13,231,940 shares. The stock had previously closed at $8.37.

Analysts Set New Price Targets

Several analysts have issued reports on RCAT shares. Evercore initiated coverage on Red Cat in a report on Monday, August 31st. They issued an "outperform" rating and a $15.00 target price for the company. Roth Capital began coverage on Red Cat in a report on Monday, June 1st. They set a "buy" rating and a $25.00 price target on the stock. Weiss Ratings reissued a "sell (d-)" rating on shares of Red Cat in a research report on Friday, July 17th. Needham & Company LLC cut 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 report on Friday, August 7th. Finally, HC Wainwright reaffirmed a "buy" rating and set a $20.00 target price on shares of Red Cat in a research note on Friday, August 7th. Two research analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, one has assigned a Hold rating and one has issued a Sell rating to the company. Based on data from MarketBeat, Red Cat has an average rating of "Moderate Buy" and an average price target of $18.00.

Red Cat Trading Up 3.8%

The stock has a market capitalization of $1.07 billion, a price-to-earnings ratio of -10.73 and a beta of 1.35. The firm's fifty day moving average price is $8.94 and its 200 day moving average price is $11.19.

Red Cat (NASDAQ:RCAT - Get Free Report) last announced its earnings results on Thursday, August 6th. The company reported ($0.26) EPS for the quarter, missing analysts' consensus estimates of ($0.21) by ($0.05). The firm had revenue of $20.20 million for 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, analysts forecast that Red Cat Holdings, Inc. will post -0.77 earnings per share for the current fiscal year.

Insider Activity at Red Cat

In related news, Director Nicholas Liuzza, Jr. sold 55,000 shares of Red Cat stock in a transaction that occurred on Tuesday, August 11th. The shares were sold at an average price of $10.63, for a total value of $584,650.00. Following the completion of the transaction, 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 ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Christopher Moe sold 20,000 shares of the company's stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $10.51, for a total transaction of $210,200.00. Following 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 SEC filing for this sale provides additional information. Over the last quarter, insiders sold 240,028 shares of company stock worth $2,692,672. Corporate insiders own 12.50% of the company's stock.

Institutional Trading of Red Cat

Hedge funds have recently modified their holdings of the stock. Arizona State Retirement System boosted its stake in shares of Red Cat by 3.0% in the 4th quarter. Arizona State Retirement System now owns 29,311 shares of the company's stock valued at $232,000 after buying an additional 855 shares during the period. CoreCap Advisors LLC increased its holdings in Red Cat by 13.8% in the second quarter. CoreCap Advisors LLC now owns 9,039 shares of the company's stock valued at $96,000 after buying an additional 1,095 shares during the last quarter. Mitsubishi UFJ Asset Management Co. Ltd. raised its stake in Red Cat by 0.7% in the fourth quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 167,084 shares of the company's stock valued at $1,325,000 after buying an additional 1,147 shares in the last quarter. Advisory Services Network LLC lifted its holdings in Red Cat by 5.3% during the 3rd quarter. Advisory Services Network LLC now owns 30,200 shares of the company's stock worth $313,000 after buying an additional 1,507 shares during the last quarter. Finally, Western Wealth Management LLC lifted its holdings in Red Cat by 4.5% during the 1st quarter. Western Wealth Management LLC now owns 36,722 shares of the company's stock worth $481,000 after buying an additional 1,570 shares during the last quarter. 37.97% of the stock is currently owned by institutional investors and hedge funds.

About Red Cat

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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