Red Cat (NASDAQ:RCAT) Trading 7.9% Higher - Time to Buy?

Key Points

• Shares rose 7.9% intraday to $13.04 (high $13.64) on Wednesday, with about 13.9 million shares traded—roughly 15% below the average session volume.
• Analyst sentiment is mixed—two Buys and one Sell—giving a MarketBeat consensus rating of Hold and a consensus target price of $20.67, implying sizable upside from current levels as several firms have raised targets to $20–$22.
• The most recent quarter showed a missed EPS of ($0.17) versus ($0.14) expected despite revenue beating estimates, leaving the company unprofitable with negative margins and an analyst forecast of about -0.5 EPS for the year, even as institutional ownership has risen to 37.97%.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price traded up 7.9% during mid-day trading on Wednesday . The stock traded as high as $13.64 and last traded at $13.04. 13,884,932 shares were traded during mid-day trading, a decline of 15% from the average session volume of 16,430,691 shares. The stock had previously closed at $12.08.

Wall Street Analyst Weigh In

RCAT has been the subject of several research reports. Northland Securities set a $22.00 price target on shares of Red Cat in a research report on Tuesday, January 20th. LADENBURG THALM/SH SH upped their price target on shares of Red Cat from $15.00 to $20.00 and gave the stock a "buy" rating in a research report on Tuesday, March 3rd. Needham & Company LLC upped their price target on shares of Red Cat from $16.00 to $20.00 and gave the stock a "buy" rating in a research report on Thursday, March 19th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Red Cat in a research report on Thursday, January 22nd. Finally, Wall Street Zen raised shares of Red Cat from a "sell" rating to a "hold" rating in a research report on Saturday, March 21st. Two equities research analysts have rated the stock with a Buy rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of "Hold" and a consensus target price of $20.67.

Red Cat Price Performance

The stock's 50-day moving average is $13.66 and its 200 day moving average is $11.50. The company has a market cap of $1.58 billion, a PE ratio of -17.36 and a beta of 1.46.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its earnings results on Wednesday, March 18th. The company reported ($0.17) EPS for the quarter, missing analysts' consensus estimates of ($0.14) by ($0.03). Red Cat had a negative net margin of 176.96% and a negative return on equity of 38.86%. The firm had revenue of $26.24 million for the quarter, compared to analysts' expectations of $24.50 million. On average, analysts expect that Red Cat Holdings, Inc. will post -0.5 EPS for the current year.

Institutional Investors Weigh In On Red Cat

A number of hedge funds and other institutional investors have recently bought and sold shares of the company. State Street Corp lifted its position in 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 acquiring an additional 3,815,310 shares during the last quarter. Vanguard Group Inc. lifted its position in 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 acquiring an additional 493,660 shares during the last quarter. Geode Capital Management LLC lifted its position in Red Cat by 13.4% during the fourth quarter. Geode Capital Management LLC now owns 2,520,524 shares of the company's stock valued at $19,991,000 after acquiring an additional 297,967 shares during the last quarter. AWM Investment Company Inc. lifted its position in Red Cat by 15.3% during the second quarter. AWM Investment Company Inc. now owns 2,037,616 shares of the company's stock valued at $14,834,000 after acquiring an additional 269,942 shares during the last quarter. Finally, Brevan Howard Capital Management LP purchased a new stake in Red Cat during the third quarter valued at approximately $19,739,000. Hedge funds and other 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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