Red Cat (NASDAQ:RCAT) Trading Down 6.9% - Should You Sell?

Key Points

• Red Cat Holdings, Inc. (NASDAQ:RCAT) saw a significant decline of 6.9% in stock price, dropping from a previous close of $9.05 to as low as $8.35 during trading.
• Wall Street analysts have adjusted their outlook on Red Cat, moving from a "sell" rating to a "hold" rating, indicating a slight shift in sentiment despite the recent stock price decrease.
• Insider activity showed increased selling pressure, with over 350,000 shares sold by directors in recent months, resulting in a 20.57% to 47.58% decrease in their respective ownership stakes.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price fell 6.9% during trading on Tuesday . The stock traded as low as $8.35 and last traded at $8.42. 2,578,606 shares traded hands during trading, a decline of 66% from the average session volume of 7,621,326 shares. The stock had previously closed at $9.05.

Analysts Set New Price Targets

Separately, Wall Street Zen upgraded Red Cat from a "sell" rating to a "hold" rating in a research report on Saturday, July 26th.

Red Cat Trading Down 1.3%

The firm has a 50-day moving average of $8.00 and a 200 day moving average of $7.27. The company has a market cap of $751.48 million, a P/E ratio of -14.99 and a beta of 1.43.

Red Cat (NASDAQ:RCAT - Get Free Report) last announced its earnings results on Wednesday, May 14th. The company reported ($0.27) EPS for the quarter, missing the consensus estimate of ($0.10) by ($0.17). On average, equities analysts predict that Red Cat Holdings, Inc. will post -0.5 EPS for the current year.

Insider Activity at Red Cat

In other Red Cat news, Director Nicholas Reyland Liuzza, Jr. sold 100,309 shares of the stock in a transaction that occurred on Wednesday, May 21st. The stock was sold at an average price of $6.70, for a total value of $672,070.30. Following the transaction, the director owned 387,445 shares in the company, valued at approximately $2,595,881.50. This represents a 20.57% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, Director Joseph David Freedman sold 150,000 shares of the stock in a transaction that occurred on Monday, June 30th. The stock was sold at an average price of $7.37, for a total value of $1,105,500.00. Following the completion of the transaction, the director owned 165,260 shares in the company, valued at approximately $1,217,966.20. The trade was a 47.58% decrease in their position. The disclosure for this sale can be found here. In the last quarter, insiders sold 350,309 shares of company stock worth $2,635,570. Corporate insiders own 15.30% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Caitong International Asset Management Co. Ltd boosted its holdings in Red Cat by 28,681.0% in the second quarter. Caitong International Asset Management Co. Ltd now owns 6,044 shares of the company's stock worth $44,000 after acquiring an additional 6,023 shares in the last quarter. Bank of America Corp DE boosted its holdings in Red Cat by 407.0% in the fourth quarter. Bank of America Corp DE now owns 3,397 shares of the company's stock worth $44,000 after acquiring an additional 2,727 shares in the last quarter. SBI Securities Co. Ltd. boosted its holdings in Red Cat by 104.4% in the first quarter. SBI Securities Co. Ltd. now owns 9,467 shares of the company's stock worth $56,000 after acquiring an additional 4,835 shares in the last quarter. Summit Trail Advisors LLC bought a new position in Red Cat in the first quarter worth approximately $59,000. Finally, AlphaQuest LLC bought a new position in Red Cat in the second quarter worth approximately $67,000. Institutional investors own 37.97% of the company's stock.

About Red Cat

Red Cat Holdings, Inc engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment.