Red Cat (NASDAQ:RCAT) Shares Down 2.2% - Time to Sell?

Key Points

• RCAT shares fell 2.2% to $10.21 in mid-day trading, below the 200-day moving average of $11.60. Despite the decline, analysts maintain an overall “Buy” rating with an average price target of $20.40.
• Red Cat’s latest quarter fell short of expectations, with an adjusted loss of $0.26 per share versus the $0.21 expected and revenue of $20.2 million versus $22.65 million forecast. The company reported a negative net margin of 136.26%.
• Insiders sold 240,028 shares worth approximately $2.7 million over the past 90 days, while institutional investors own 37.97% of the company, including significant positions from BlackRock, State Street, and Vanguard.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) traded down 2.2% on Tuesday . The company traded as low as $9.80 and last traded at $10.21. 9,050,213 shares traded hands during mid-day trading, a decline of 35% from the average daily volume of 13,877,871 shares. The stock had previously closed at $10.44.

Analysts Set New Price Targets

RCAT has been the topic of several recent research reports. Needham & Company LLC lowered their price objective on shares of Red Cat from $20.00 to $15.00 and set a "buy" rating on the stock in a research note on Friday, August 7th. Wall Street Zen lowered shares of Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. LADENBURG THALM/SH SH upgraded shares of Red Cat to a "strong-buy" rating in a report on Wednesday, May 6th. HC Wainwright restated a "buy" rating and issued a $20.00 price target on shares of Red Cat in a research report on Friday, August 7th. Finally, UBS Group assumed coverage on Red Cat in a report on Wednesday, May 27th. They issued a "buy" rating on the stock. Two investment analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has an average rating of "Buy" and an average target price of $20.40.

Red Cat Trading Down 2.3%

The stock has a 50-day moving average of $9.47 and a two-hundred day moving average of $11.60. The firm has a market cap of $1.25 billion, a price-to-earnings ratio of -12.59 and a beta of 1.32.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its quarterly earnings data 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%. Sell-side analysts expect that Red Cat Holdings, Inc. will post -0.78 EPS for the current fiscal year.

Insider Activity at Red Cat

In related 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 transaction, 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 document filed with the SEC, which is accessible through this hyperlink. Also, Director Christopher R. Moe sold 20,000 shares of the firm's stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $10.51, for a total transaction of $210,200.00. Following the completion of the transaction, the director directly owned 200,502 shares of the company's stock, valued at $2,107,276.02. This represents a 9.07% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. In the last 90 days, insiders sold 240,028 shares of company stock worth $2,692,672. 12.50% of the stock is owned by corporate insiders.

Institutional Trading of Red Cat

Several hedge funds and other institutional investors have recently modified their holdings of RCAT. BlackRock Inc. purchased a new position in shares of Red Cat during the second quarter valued at $119,610,000. State Street Corp lifted its stake in Red Cat by 136.4% in the 4th 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 in the last quarter. Vanguard Group Inc. boosted its position in Red Cat by 9.0% during the 4th quarter. Vanguard Group Inc. now owns 6,000,037 shares of the company's stock worth $47,580,000 after acquiring an additional 493,660 shares during the period. Geode Capital Management LLC boosted its position in Red Cat by 13.4% during the 4th quarter. Geode Capital Management LLC now owns 2,520,524 shares of the company's stock worth $19,991,000 after acquiring an additional 297,967 shares during the period. Finally, Davidson Kempner Capital Management LP purchased a new position in Red Cat during the 3rd quarter valued at about $17,286,000. Institutional investors and hedge funds own 37.97% of the company's stock.

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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