Red Cat (NASDAQ:RCAT) Shares Down 7.2% - What's Next?

Key Points

• Red Cat shares fell 7.2% to $8.93 in mid-day trading, with volume down 48% from the average session. The stock remains below its 50-day and 200-day moving averages.
• Analysts maintain a generally positive outlook, with an average “Buy” rating and a $20.40 price target, although Needham recently reduced its target from $20 to $15.
• The company missed quarterly expectations, reporting an adjusted loss of $0.26 per share versus an expected loss of $0.21 and revenue of $20.2 million versus the $22.65 million consensus. Insiders have also sold 240,028 shares worth approximately $2.7 million over the past quarter.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) shares fell 7.2% on Monday . The stock traded as low as $8.78 and last traded at $8.93. 7,150,653 shares were traded during mid-day trading, a decline of 48% from the average session volume of 13,715,996 shares. The stock had previously closed at $9.62.

Analysts Set New Price Targets

Several brokerages recently issued reports on RCAT. Roth Capital started coverage on shares of Red Cat in a report on Monday, June 1st. They set a "buy" rating and a $25.00 price target for the company. UBS Group started coverage on shares of Red Cat in a report on Wednesday, May 27th. They set a "buy" rating for the company. Needham & Company LLC cut their target price 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. LADENBURG THALM/SH SH upgraded shares of Red Cat to a "strong-buy" rating in a research note on Wednesday, May 6th. Finally, Clear Str upgraded Red Cat to a "strong-buy" rating in a research report on Wednesday, April 29th. Two research analysts have rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has given a Sell rating to the company. According to data from MarketBeat, Red Cat has an average rating of "Buy" and an average target price of $20.40.

Red Cat Price Performance

The stock's 50 day simple moving average is $9.35 and its two-hundred day simple moving average is $11.47. The company has a market capitalization of $1.10 billion, a P/E ratio of -11.02 and a beta of 1.31.

Red Cat (NASDAQ:RCAT - Get Free Report) last released 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). The company had revenue of $20.20 million for the quarter, compared to the consensus estimate of $22.65 million. Red Cat had a negative net margin of 136.26% and a negative return on equity of 32.25%. As a group, equities research analysts expect that Red Cat Holdings, Inc. will post -0.78 earnings per share for the current year.

Insiders Place Their Bets

In other news, Director Paul Funk II sold 165,028 shares of Red Cat stock in a transaction on Thursday, June 11th. The stock was sold at an average price of $11.50, for a total value of $1,897,822.00. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. Also, Director Christopher R. Moe sold 20,000 shares of the business'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 sale, the director owned 200,502 shares of the company's stock, valued at approximately $2,107,276.02. The trade was a 9.07% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders have sold 240,028 shares of company stock valued at $2,692,672. 12.50% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On Red Cat

Several hedge funds have recently added to or reduced their stakes in RCAT. Fifth Third Bancorp bought a new stake in Red Cat during the 1st quarter worth about $33,000. Allworth Financial LP bought a new position in shares of Red Cat in the 2nd quarter valued at about $28,000. IFP Advisors Inc grew its position in shares of Red Cat by 181.1% during the 3rd quarter. IFP Advisors Inc now owns 2,670 shares of the company's stock worth $28,000 after buying an additional 1,720 shares during the period. NFSG Corp grew its position in shares of Red Cat by 200.0% during the 1st quarter. NFSG Corp now owns 3,000 shares of the company's stock worth $39,000 after buying an additional 2,000 shares during the period. Finally, PNC Financial Services Group Inc. raised its stake in shares of Red Cat by 294.6% during the first quarter. PNC Financial Services Group Inc. now owns 3,042 shares of the company's stock worth $40,000 after buying an additional 2,271 shares during the last quarter. Institutional investors own 37.97% of the company's stock.

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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