Red Cat (NASDAQ:RCAT) Trading Down 3% - Here's Why

Key Points

• Red Cat shares fell 3% to $9.89 during mid-day trading, with volume down 58% from the stock’s average daily volume.
• Analyst sentiment remains broadly positive: the stock carries an average “Buy” rating and a $20.40 average price target, though Needham lowered its target to $15 and Weiss Ratings maintained a “sell” rating.
• Recent quarterly results missed expectations, with a $0.26 per-share loss versus the projected $0.21 loss and revenue of $20.2 million versus the $22.65 million estimate; insiders also sold 240,028 shares worth $2.69 million over the past three months.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s stock price traded down 3% on Wednesday . The company traded as low as $9.63 and last traded at $9.89. 5,750,719 shares were traded during mid-day trading, a decline of 58% from the average daily volume of 13,831,572 shares. The stock had previously closed at $10.20.

Wall Street Analyst Weigh In

RCAT has been the topic of several recent analyst reports. Clear Str upgraded Red Cat to a "strong-buy" rating in a report on Wednesday, April 29th. HC Wainwright reissued a "buy" rating and issued a $20.00 target price on shares of Red Cat in a research report on Friday, August 7th. Needham & Company LLC reduced their price target on shares of Red Cat from $20.00 to $15.00 and set a "buy" rating for the company in a research report on Friday, August 7th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Red Cat in a research note on Friday, July 17th. Finally, LADENBURG THALM/SH SH upgraded shares of Red Cat to a "strong-buy" rating in a research report on Wednesday, May 6th. Two research analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and one has given a Sell rating to the stock. Based on data from MarketBeat, the stock currently has an average rating of "Buy" and an average target price of $20.40.

Red Cat Stock Performance

The business's 50 day simple moving average is $9.45 and its 200-day simple moving average is $11.56. The company has a market cap of $1.21 billion, a price-to-earnings ratio of -12.21 and a beta of 1.32.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its quarterly earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share for the quarter, missing analysts' consensus estimates of ($0.21) by ($0.05). Red Cat had a negative return on equity of 32.25% and a negative net margin of 136.26%.The company had revenue of $20.20 million during the quarter, compared to analyst estimates of $22.65 million. Research analysts expect that Red Cat Holdings, Inc. will post -0.78 earnings per share for the current year.

Insider Transactions at Red Cat

In other news, Director Christopher R. Moe sold 20,000 shares of the firm's stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $10.51, for a total transaction of $210,200.00. Following the completion of the sale, the director directly owned 200,502 shares of the company's stock, valued at $2,107,276.02. This trade represents a 9.07% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Paul Funk II sold 165,028 shares of Red Cat stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $11.50, for a total value of $1,897,822.00. The disclosure for this sale is available in the SEC filing. Insiders sold 240,028 shares of company stock valued at $2,692,672 in the last three months. Corporate insiders own 12.50% of the company's stock.

Institutional Trading of Red Cat

Several large investors have recently added to or reduced their stakes in the business. Empowered Funds LLC acquired a new position in shares of Red Cat during the 2nd quarter worth $3,816,000. Equitable Holdings Inc. bought a new stake in Red Cat in the second quarter worth $437,000. Capstone Investment Advisors LLC bought a new stake in Red Cat in the second quarter worth $187,000. Corient Private Wealth LP acquired a new position in Red Cat during the second quarter worth $296,000. Finally, Bank of America Corp DE acquired a new position in Red Cat during the second quarter worth $9,211,000. 37.97% of the stock is owned by institutional investors.

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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