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

Key Points

• Red Cat shares gapped down at the open, falling from a prior close of $8.59 to an opening price of $8.17 before trading around $8.39.
• Analyst sentiment remains mostly positive, with a consensus rating of “Buy” and an average price target of $21.40, despite one recent downgrade to “strong sell.”
• Recent fundamentals were weak: Red Cat missed earnings and revenue estimates in its latest quarterly report, even though revenue still surged year over year.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) gapped down before the market opened on Wednesday . The stock had previously closed at $8.59, but opened at $8.17. Red Cat shares last traded at $8.3880, with a volume of 1,728,038 shares.

Wall Street Analyst Weigh In

A number of research analysts recently weighed in on the company. LADENBURG THALM/SH SH raised Red Cat to a "strong-buy" rating in a report on Wednesday, May 6th. HC Wainwright started coverage on shares of Red Cat in a research report on Wednesday, May 27th. They set a "buy" rating and a $20.00 price objective for the company. Wall Street Zen downgraded shares of Red Cat from a "sell" rating to a "strong sell" rating in a report on Saturday. Clear Str raised shares of Red Cat to a "strong-buy" rating in a research report on Wednesday, April 29th. Finally, Weiss Ratings restated a "sell (d-)" rating on shares of Red Cat in a research note on Friday. Two analysts have rated the stock with a Strong Buy rating, four have issued a Buy rating and one has assigned a Sell rating to the stock. According to MarketBeat, Red Cat presently has a consensus rating of "Buy" and an average target price of $21.40.

Red Cat Price Performance

The firm has a 50-day moving average price of $10.45 and a 200 day moving average price of $12.16. The company has a market cap of $1.01 billion, a price-to-earnings ratio of -11.73 and a beta of 1.29.

Red Cat (NASDAQ:RCAT - Get Free Report) last released its quarterly earnings results on Thursday, May 7th. The company reported ($0.22) earnings per share for the quarter, missing the consensus estimate of ($0.12) by ($0.10). The firm had revenue of $15.47 million for the quarter, compared to analyst estimates of $17.63 million. Red Cat had a negative return on equity of 35.86% and a negative net margin of 138.36%.Red Cat's quarterly revenue was up 849.1% on a year-over-year basis. On average, equities analysts anticipate that Red Cat Holdings, Inc. will post -0.67 EPS for the current fiscal 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 transaction of $1,897,822.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. 12.50% of the stock is owned by insiders.

Hedge Funds Weigh In On Red Cat

Institutional investors and hedge funds have recently modified their holdings of the business. Tudor Investment Corp ET AL raised its position in shares of Red Cat by 214.0% in the third quarter. Tudor Investment Corp ET AL now owns 1,277,523 shares of the company's stock valued at $13,222,000 after buying an additional 870,612 shares in the last quarter. EVR Research LP acquired a new stake in Red Cat during the fourth quarter worth approximately $1,705,000. Caitong International Asset Management Co. Ltd increased its stake in Red Cat by 1,825.1% during the 4th quarter. Caitong International Asset Management Co. Ltd now owns 54,152 shares of the company's stock worth $429,000 after acquiring an additional 51,339 shares during the period. Vanguard Group Inc. increased its stake 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. Finally, UBS Group AG raised its holdings in Red Cat by 37.7% in the 4th quarter. UBS Group AG now owns 580,099 shares of the company's stock valued at $4,600,000 after acquiring an additional 158,864 shares in the last quarter. 37.97% of the stock is currently owned by institutional investors and hedge funds.

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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