Red Cat (NASDAQ:RCAT) Trading Down 6.5% - What's Next?

Key Points

• Shares fell 6.5% to $10.285 on Tuesday (from $11.00) with about 5.13 million shares traded, roughly a 66% decline versus average daily volume.
• Analysts are broadly optimistic with an average rating of "Moderate Buy" and an average price target of $20.67, including several raises to the $20–$22 range despite one sell rating.
• The company reported a quarterly EPS miss—($0.17) vs. ($0.14) expected—and has negative margins and ROE, though revenue of $26.24 million beat estimates; market cap is about $1.26 billion with ~38% institutional ownership.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) shares were down 6.5% on Tuesday . The stock traded as low as $10.30 and last traded at $10.2850. Approximately 5,127,884 shares were traded during trading, a decline of 66% from the average daily volume of 14,879,563 shares. The stock had previously closed at $11.00.

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on RCAT shares. Needham & Company LLC boosted their price objective on shares of Red Cat from $16.00 to $20.00 and gave the company a "buy" rating in a report on Thursday, March 19th. Weiss Ratings reissued a "sell (d-)" rating on shares of Red Cat in a report on Tuesday, April 21st. LADENBURG THALM/SH SH boosted their price objective on shares of Red Cat from $15.00 to $20.00 and gave the company a "buy" rating in a report on Tuesday, March 3rd. Northland Securities set a $22.00 price objective on shares of Red Cat in a report on Tuesday, January 20th. Finally, Clear Str raised shares of Red Cat to a "strong-buy" rating in a report on Wednesday, April 29th. One research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, Red Cat currently has an average rating of "Moderate Buy" and an average price target of $20.67.

Red Cat Stock Down 5.2%

The firm has a market capitalization of $1.26 billion, a PE ratio of -13.91 and a beta of 1.21. The stock's fifty day simple moving average is $13.53 and its 200 day simple moving average is $11.50.

Red Cat (NASDAQ:RCAT - Get Free Report) last announced 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 business had revenue of $26.24 million for the quarter, compared to analysts' expectations of $24.50 million. On average, analysts predict that Red Cat Holdings, Inc. will post -0.34 EPS for the current year.

Institutional Trading of Red Cat

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in RCAT. Brevan Howard Capital Management LP bought a new position in shares of Red Cat in the third quarter worth approximately $19,739,000. Tudor Investment Corp ET AL boosted 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 worth $13,222,000 after purchasing an additional 870,612 shares during the period. Kornitzer Capital Management Inc. KS bought a new position in shares of Red Cat in the third quarter worth approximately $880,000. SG Americas Securities LLC bought a new position in shares of Red Cat in the third quarter worth approximately $418,000. Finally, Baader Bank Aktiengesellschaft bought a new position in shares of Red Cat in the third quarter worth approximately $491,000. 37.97% of the stock is owned by hedge funds and other 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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