Red Cat (NASDAQ:RCAT) Shares Up 2.6% - Should You Buy?

Key Points

• Red Cat shares rose 2.6% in Thursday trading, reaching an intraday high of $8.12 before last trading at $8.03. Volume was lighter than usual, with about 8.0 million shares changing hands versus a 14.4 million average.
• Wall Street sentiment is broadly positive: multiple firms recently upgraded or initiated coverage on the stock with buy ratings, and MarketBeat shows a consensus rating of Buy with a $21.40 average price target.
• Recent fundamentals remain mixed despite strong year-over-year revenue growth of 849.1%, since the company missed earnings and revenue expectations in its latest quarter and remains unprofitable.

Shares of Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) traded up 2.6% during mid-day trading on Thursday . The stock traded as high as $8.12 and last traded at $8.03. 8,017,233 shares changed hands during mid-day trading, a decline of 44% from the average daily volume of 14,395,209 shares. The stock had previously closed at $7.83.

Wall Street Analyst Weigh In

Several brokerages have weighed in on RCAT. LADENBURG THALM/SH SH upgraded Red Cat to a "strong-buy" rating in a research note on Wednesday, May 6th. Clear Str raised Red Cat to a "strong-buy" rating in a report on Wednesday, April 29th. UBS Group started coverage on shares of Red Cat in a research report on Wednesday, May 27th. They issued a "buy" rating on the stock. Roth Capital started coverage on shares of Red Cat in a research note on Monday, June 1st. They issued a "buy" rating and a $25.00 price objective on the stock. Finally, HC Wainwright began 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. Two equities research 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 company. Based on data from MarketBeat, Red Cat currently has a consensus rating of "Buy" and a consensus price target of $21.40.

Red Cat Trading Up 2.6%

The stock has a market capitalization of $985.60 million, a PE ratio of -11.47 and a beta of 1.29. The firm has a 50 day moving average of $10.42 and a two-hundred day moving average of $12.16.

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). Red Cat had a negative return on equity of 35.86% and a negative net margin of 138.36%.The company had revenue of $15.47 million for the quarter, compared to analysts' expectations of $17.63 million. Red Cat's revenue for the quarter was up 849.1% compared to the same quarter last year. Equities research analysts forecast that Red Cat Holdings, Inc. will post -0.67 EPS for the current year.

Insider Activity

In other Red Cat news, Director Paul Funk II sold 165,028 shares of Red Cat stock in a transaction on Thursday, June 11th. The shares were sold at an average price of $11.50, for a total value of $1,897,822.00. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Company insiders own 12.50% of the company's stock.

Hedge Funds Weigh In On Red Cat

Hedge funds and other institutional investors have recently made changes to their positions in the business. IFP Advisors Inc raised its position in Red Cat by 181.1% in the third quarter. IFP Advisors Inc now owns 2,670 shares of the company's stock worth $28,000 after acquiring an additional 1,720 shares in the last quarter. Fifth Third Bancorp purchased a new stake in shares of Red Cat during the 1st quarter worth about $33,000. California State Teachers Retirement System acquired a new stake in shares of Red Cat in the 2nd quarter valued at $34,000. NFSG Corp lifted its position in shares of Red Cat by 200.0% in the first 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 last quarter. Finally, PNC Financial Services Group Inc. boosted its position in 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 purchasing an additional 2,271 shares during the period. 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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