Red Cat (NASDAQ:RCAT) Trading Up 5.2% - Should You Buy?

Key Points

• Red Cat shares were trading up 5.2% midday to roughly $13.71–$13.83 on about 9.97M shares (a 37% drop vs. average volume); the company has a market cap near $1.66B, a negative PE, and a beta of 1.46. The latest quarter missed EPS (‑$0.17 vs. ‑$0.14 est.) but topped revenue estimates ($26.24M vs. $24.50M) while showing deeply negative net margin and ROE.
• Analyst and institutional sentiment is mixed: two analysts rate RCAT a Buy and one a Sell, giving a consensus of Hold with an average price target of $20.67 and several firms recently raising targets to the $20–$22 range; roughly 38% of shares are held by hedge funds and other institutions, many of which increased positions recently.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report)'s share price was up 5.2% during mid-day trading on Thursday . The stock traded as high as $13.83 and last traded at $13.71. Approximately 9,967,968 shares changed hands during trading, a decline of 37% from the average daily volume of 15,810,123 shares. The stock had previously closed at $13.03.

Wall Street Analysts Forecast Growth

Several equities research analysts have recently issued reports on RCAT shares. Needham & Company LLC lifted their price objective 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. LADENBURG THALM/SH SH boosted their price target on shares of Red Cat from $15.00 to $20.00 and gave the company a "buy" rating in a research report on Tuesday, March 3rd. Weiss Ratings reissued a "sell (d-)" rating on shares of Red Cat in a research report on Thursday, January 22nd. Northland Securities set a $22.00 price target on shares of Red Cat in a research report on Tuesday, January 20th. 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 analysts have rated the stock with a Buy rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the company has a consensus rating of "Hold" and an average price target of $20.67.

Red Cat Stock Up 5.2%

The business's 50-day moving average is $13.47 and its two-hundred day moving average is $11.57. The stock has a market capitalization of $1.66 billion, a PE ratio of -18.28 and a beta of 1.46.

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 during the quarter, compared to analysts' expectations of $24.50 million. As a group, analysts anticipate that Red Cat Holdings, Inc. will post -0.5 EPS for the current year.

Institutional Investors Weigh In On Red Cat

A number of institutional investors and hedge funds have recently made changes to their positions in RCAT. Bank of America Corp DE raised its holdings in shares of Red Cat by 407.0% in the fourth quarter. Bank of America Corp DE now owns 3,397 shares of the company's stock valued at $44,000 after buying an additional 2,727 shares during the last quarter. Royal Bank of Canada raised its holdings in shares of Red Cat by 76.4% in the first quarter. Royal Bank of Canada now owns 57,800 shares of the company's stock valued at $340,000 after buying an additional 25,031 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. raised its holdings in shares of Red Cat by 63.6% in the first quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 229,259 shares of the company's stock valued at $1,348,000 after buying an additional 89,095 shares during the last quarter. Goldman Sachs Group Inc. raised its holdings in shares of Red Cat by 28.7% in the first quarter. Goldman Sachs Group Inc. now owns 266,099 shares of the company's stock valued at $1,565,000 after buying an additional 59,334 shares during the last quarter. Finally, Cetera Investment Advisers purchased a new stake in shares of Red Cat in the second quarter valued at about $97,000. 37.97% of the stock is owned by hedge funds and other institutional investors.

About Red Cat

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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