Red Cat (NASDAQ:RCAT) Trading Down 9.1% - Here's Why

Key Points

• Red Cat shares fell 9.1% to $6.77 in mid-day trading, with about 7.6 million shares changing hands—47% below average volume.
• Analyst sentiment remains broadly positive, with a consensus “Buy” rating and a $21.40 target price, despite Wall Street Zen downgrading the stock to “strong sell.”
• The company’s latest quarter missed expectations, reporting a $0.22-per-share loss and $15.47 million in revenue, although revenue increased 849.1% year over year; Red Cat also continues to report substantial negative margins.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) shares dropped 9.1% during mid-day trading on Wednesday . The company traded as low as $6.71 and last traded at $6.77. Approximately 7,582,651 shares traded hands during trading, a decline of 47% from the average session volume of 14,177,857 shares. The stock had previously closed at $7.45.

Analyst Ratings Changes

RCAT has been the topic of a number of recent research reports. Wall Street Zen downgraded shares of Red Cat from a "sell" rating to a "strong sell" rating in a research note on Saturday, July 18th. HC Wainwright started coverage on shares of Red Cat in a report on Wednesday, May 27th. They set a "buy" rating and a $20.00 price objective for the company. Clear Str upgraded shares of Red Cat to a "strong-buy" rating in a research report on Wednesday, April 29th. LADENBURG THALM/SH SH raised shares of Red Cat to a "strong-buy" rating in a research note on Wednesday, May 6th. Finally, UBS Group started coverage on shares of Red Cat in a research note on Wednesday, May 27th. They set a "buy" rating for the company. Two analysts have rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Buy" and a consensus target price of $21.40.

Red Cat Stock Performance

The company's 50 day moving average price is $10.30 and its 200 day moving average price is $12.09. The company has a market cap of $830.95 million, a price-to-earnings ratio of -9.67 and a beta of 1.29.

Red Cat (NASDAQ:RCAT - Get Free Report) last announced its earnings results on Thursday, May 7th. The company reported ($0.22) earnings per share (EPS) for the quarter, missing analysts' consensus estimates of ($0.12) by ($0.10). The firm had revenue of $15.47 million for the quarter, compared to analyst estimates of $17.63 million. Red Cat had a negative return on equity of 35.86% and a negative net margin of 138.36%.The company's quarterly revenue was up 849.1% on a year-over-year basis. As a group, analysts predict that Red Cat Holdings, Inc. will post -0.68 EPS for the current year.

Insiders Place Their Bets

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 stock was sold at an average price of $11.50, for a total value of $1,897,822.00. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. 12.50% of the stock is owned by corporate insiders.

Institutional Trading of Red Cat

Several large investors have recently made changes to their positions in RCAT. State Street Corp raised its holdings in shares of Red Cat by 136.4% in the fourth quarter. State Street Corp now owns 6,612,153 shares of the company's stock valued at $52,434,000 after buying an additional 3,815,310 shares during the last quarter. Vanguard Group Inc. grew its holdings in Red Cat by 43.9% during the 3rd quarter. Vanguard Group Inc. now owns 5,506,377 shares of the company's stock worth $56,991,000 after acquiring an additional 1,680,929 shares during the last quarter. Davidson Kempner Capital Management LP acquired a new stake in Red Cat in the 3rd quarter valued at about $17,286,000. Renaissance Technologies LLC bought a new position in shares of Red Cat in the first quarter worth about $18,533,000. Finally, CenterBook Partners LP raised its stake in shares of Red Cat by 1,872.4% in the fourth quarter. CenterBook Partners LP now owns 1,105,132 shares of the company's stock worth $8,764,000 after acquiring an additional 1,049,101 shares during the last quarter. 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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