Red Cat Sees Unusually Large Options Volume (NASDAQ:RCAT)

Key Points

• RCAT saw unusually heavy options activity, with 54,752 call options traded on Thursday, about 82% above its average daily call volume. That suggests traders were positioning for more upside in the stock.
• Several analysts remain bullish on Red Cat, including new buy ratings from HC Wainwright and UBS, plus a boosted price target from Needham to $20. The consensus analyst rating is still a Buy with an average target of $20.50.
• The stock has been volatile but momentum is strong, rising to $14.11 on heavy volume as defense-drone enthusiasm builds. Recent catalysts include growing institutional ownership and news that Red Cat’s Blue Ops division is ramping Variant 7 vessel production to full rate.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) was the target of unusually large options trading on Thursday. Stock investors purchased 54,752 call options on the company. This represents an increase of approximately 82% compared to the average daily volume of 30,054 call options.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. State Street Corp grew its position in Red Cat by 136.4% in the fourth quarter. State Street Corp now owns 6,612,153 shares of the company's stock worth $52,434,000 after acquiring an additional 3,815,310 shares in the last quarter. Vanguard Group Inc. grew its position in Red Cat by 9.0% in the fourth quarter. Vanguard Group Inc. now owns 6,000,037 shares of the company's stock worth $47,580,000 after acquiring an additional 493,660 shares in the last quarter. Geode Capital Management LLC grew its position in Red Cat by 13.4% in the fourth quarter. Geode Capital Management LLC now owns 2,520,524 shares of the company's stock worth $19,991,000 after acquiring an additional 297,967 shares in the last quarter. Brevan Howard Capital Management LP purchased a new position in Red Cat in the third quarter worth about $19,739,000. Finally, Davidson Kempner Capital Management LP purchased a new position in Red Cat in the third quarter worth about $17,286,000. Hedge funds and other institutional investors own 37.97% of the company's stock.

Analyst Ratings Changes

A number of brokerages have issued reports on RCAT. Clear Str upgraded Red Cat to a "strong-buy" rating in a research note on Wednesday, April 29th. HC Wainwright began coverage on Red Cat in a research note on Wednesday. They issued a "buy" rating and a $20.00 price target for the company. UBS Group began coverage on Red Cat in a research note on Wednesday. They issued a "buy" rating for the company. Needham & Company LLC increased their price target on Red Cat from $16.00 to $20.00 and gave the stock a "buy" rating in a research note on Thursday, March 19th. Finally, Wall Street Zen lowered Red Cat from a "hold" rating to a "sell" rating in a research note on Saturday, May 2nd. Two investment analysts have rated the stock with a Strong Buy rating, three have issued a Buy rating and one has given a Sell rating to the company's stock. According to data from MarketBeat.com, the stock currently has an average rating of "Buy" and a consensus price target of $20.50.

Red Cat Price Performance

Shares of Red Cat stock traded up $3.44 during trading on Thursday, reaching $14.11. 56,027,897 shares of the stock traded hands, compared to its average volume of 14,873,763. The company has a market capitalization of $1.73 billion, a price-to-earnings ratio of -20.23 and a beta of 1.21. The business has a fifty day simple moving average of $12.05 and a two-hundred day simple moving average of $11.36. Red Cat has a 52-week low of $5.71 and a 52-week high of $18.78.

Red Cat (NASDAQ:RCAT - Get Free Report) last issued its quarterly earnings data on Thursday, May 7th. The company reported ($0.22) earnings per share 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 analysts' expectations of $17.63 million. Red Cat had a negative net margin of 138.36% and a negative return on equity of 35.86%. The business's revenue for the quarter was up 849.1% compared to the same quarter last year. On average, research analysts predict that Red Cat will post -0.65 earnings per share for the current fiscal year.

More Red Cat News

Here are the key news stories impacting Red Cat this week:

• Positive Sentiment: Reports that the Trump administration and Pentagon are discussing funding support for domestic drone makers, including possible direct equity stakes, have sparked a broad rally in defense drone stocks and pushed investors into RCAT. Drone Stock Takes Off as Trump Administration Buzz Builds
• Positive Sentiment: Red Cat announced that its Blue Ops maritime division is ramping Variant 7 uncrewed surface vessel production to full rate, reinforcing growth in its all-domain autonomy platform across air, land, and sea. Blue Ops Ramps into Full-Rate Production of U.S.-Built Variant 7
• Positive Sentiment: Options trading surged, with call volume running well above normal, suggesting traders are positioning for more upside in RCAT. Drone Stock Takes Off as Trump Administration Buzz Builds
• Positive Sentiment: HC Wainwright initiated coverage with a buy rating and a $20 price target, which is above recent trading levels and supports bullish sentiment. Coverage update
• Neutral Sentiment: Several market headlines highlight RCAT as one of the premarket and overnight leaders among drone names, reflecting sector momentum rather than company-specific news. Why ONDS, RCAT And Other Drone Stocks Are Surging In Overnight Trading

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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