Stock Traders Purchase High Volume of Call Options on Red Cat (NASDAQ:RCAT)

Key Points

• Traders purchased 36,890 call options on Red Cat (RCAT) on Monday, roughly 58% above the stock's average daily call volume, indicating unusually strong bullish options activity.
• Several institutional investors added or enlarged stakes—Brevan Howard and Davidson Kempner opened sizable positions and Vanguard boosted its holding by 43.9% to 5,506,377 shares—while analyst views are mixed but MarketBeat's consensus rating is a Buy with a $14 target.
• Shares jumped $1.56 to $10.72 on heavy trading despite a quarterly EPS miss (‑$0.16 vs. ‑$0.07 consensus) and the company trades with a market cap of about $1.28 billion and a negative P/E.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Get Free Report) saw unusually large options trading on Monday. Traders purchased 36,890 call options on the stock. This is an increase of approximately 58% compared to the average daily volume of 23,414 call options.

Analysts Set New Price Targets

RCAT has been the subject of several recent analyst reports. Weiss Ratings reiterated a "sell (d-)" rating on shares of Red Cat in a report on Wednesday, October 8th. Needham & Company LLC lowered their target price on shares of Red Cat from $17.00 to $12.00 and set a "buy" rating on the stock in a research note on Friday, November 14th. Wall Street Zen lowered shares of Red Cat from a "hold" rating to a "sell" rating in a report on Saturday, October 4th. Finally, LADENBURG THALM/SH SH upgraded Red Cat to a "strong-buy" rating in a research report on Thursday, December 18th. Two analysts have rated the stock with a Strong Buy rating, two have given a Buy rating and one has given a Sell rating to the company's stock. According to MarketBeat, Red Cat has a consensus rating of "Buy" and a consensus target price of $14.00.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. Brevan Howard Capital Management LP purchased a new stake in Red Cat in the 3rd quarter worth approximately $19,739,000. Vanguard Group Inc. lifted its stake in shares of Red Cat by 43.9% in 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 period. Davidson Kempner Capital Management LP acquired a new position in Red Cat in the third quarter worth approximately $17,286,000. Geode Capital Management LLC increased its holdings in shares of Red Cat by 142.7% in the 2nd quarter. Geode Capital Management LLC now owns 1,656,720 shares of the company's stock valued at $12,063,000 after purchasing an additional 974,121 shares during the period. Finally, Tudor Investment Corp ET AL grew its position in 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 acquiring an additional 870,612 shares in the last quarter. Institutional investors own 37.97% of the company's stock.

Red Cat Price Performance

Red Cat stock traded up $1.56 during midday trading on Monday, hitting $10.72. The company's stock had a trading volume of 12,713,652 shares, compared to its average volume of 12,006,891. Red Cat has a 1-year low of $4.58 and a 1-year high of $16.70. The company has a 50-day moving average price of $8.32 and a two-hundred day moving average price of $9.28. The company has a market cap of $1.28 billion, a price-to-earnings ratio of -24.28 and a beta of 1.48.

Red Cat (NASDAQ:RCAT - Get Free Report) last released its quarterly earnings data on Thursday, November 13th. The company reported ($0.16) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.07) by ($0.09). The firm had revenue of $9.65 million during the quarter, compared to the consensus estimate of $8.18 million. Sell-side analysts forecast that Red Cat will post -0.5 EPS for the current year.

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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