Red Cat (NASDAQ:RCAT) Shares Down 3.6% - What's Next?

Key Points

• Red Cat shares fell 3.6% to $9.53 during midday trading, with volume below its average; the stock has a market capitalization of about $1.17 billion.
• Analyst sentiment remains broadly positive, with a consensus “Buy” rating and a $20.40 price target, despite Needham lowering its target to $15.00.
• The company missed quarterly expectations, reporting an adjusted loss of $0.26 per share versus the expected $0.21 loss and revenue of $20.2 million versus $22.65 million expected. Insiders have sold 240,028 shares worth approximately $2.7 million over the past 90 days.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) shares traded down 3.6% during mid-day trading on Thursday . The company traded as low as $9.05 and last traded at $9.53. Approximately 7,065,084 shares traded hands during mid-day trading, a decline of 49% from the average daily volume of 13,789,553 shares. The stock had previously closed at $9.89.

Analysts Set New Price Targets

A number of analysts have recently weighed in on the stock. LADENBURG THALM/SH SH raised shares of Red Cat to a "strong-buy" rating in a research report on Wednesday, May 6th. Wall Street Zen cut shares of Red Cat from a "sell" rating to a "strong sell" rating in a research report on Saturday, July 18th. UBS Group assumed coverage on shares of Red Cat in a research note on Wednesday, May 27th. They set a "buy" rating on the stock. Needham & Company LLC cut their price objective on shares of Red Cat from $20.00 to $15.00 and set a "buy" rating on the stock in a report on Friday, August 7th. Finally, Roth Capital started coverage on shares of Red Cat in a research note on Monday, June 1st. They set a "buy" rating and a $25.00 target price for the company. Two analysts have rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Red Cat presently has a consensus rating of "Buy" and a consensus price target of $20.40.

Red Cat Price Performance

The business has a 50 day moving average price of $9.43 and a 200 day moving average price of $11.52. The stock has a market capitalization of $1.17 billion, a PE ratio of -11.77 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) earnings per share (EPS) for the quarter, missing the consensus estimate 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 return on equity of 32.25% and a negative net margin of 136.26%. On average, equities analysts expect that Red Cat Holdings, Inc. will post -0.78 earnings per share for the current year.

Insiders Place Their Bets

In other Red Cat news, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of Red Cat stock in a transaction dated 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 directly owned 489,874 shares of the company's stock, 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 filing with the Securities & Exchange Commission, which is accessible through this link. Also, Director Paul Funk II sold 165,028 shares of the company's stock in a transaction that occurred on Thursday, June 11th. The stock was sold at an average price of $11.50, for a total transaction of $1,897,822.00. The disclosure for this sale is available in the SEC filing. Over the last ninety days, insiders sold 240,028 shares of company stock valued at $2,692,672. Insiders own 12.50% of the company's stock.

Institutional Trading of Red Cat

Institutional investors have recently added to or reduced their stakes in the business. BlackRock Inc. purchased a new position in shares of Red Cat in the second quarter worth $119,610,000. State Street Corp boosted its position in shares of Red Cat by 136.4% during the fourth quarter. State Street Corp now owns 6,612,153 shares of the company's stock valued at $52,434,000 after buying an additional 3,815,310 shares during the last quarter. Vanguard Group Inc. boosted its position in shares of Red Cat by 9.0% during 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 bought a new stake in Red Cat in the 2nd quarter worth about $27,193,000. Finally, Geode Capital Management LLC increased its holdings in Red Cat by 13.4% in the 4th 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 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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