Red Cat (NASDAQ:RCAT) Shares Down 2% – Should You Sell?

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s stock price dropped 2% during trading on Thursday. The stock traded as low as $6.31 and last traded at $6.33. Approximately 5,619,497 shares were traded during mid-day trading, a decline of 56% from the average session volume of 12,875,620 shares. The stock had previously closed at $6.46.

Analyst Upgrades and Downgrades

A number of equities research analysts recently issued reports on the company. Evercore initiated coverage on Red Cat in a research report on Monday, August 31st. They issued an “outperform” rating and a $15.00 target price on the stock. Wall Street Zen downgraded Red Cat from a “sell” rating to a “strong sell” rating in a research report on Saturday, July 18th. HC Wainwright reaffirmed a “buy” rating and set a $20.00 price target on shares of Red Cat in a research note on Friday, August 7th. Northland Securities set a $13.00 price objective on shares of Red Cat in a research report on Thursday, September 17th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Red Cat in a research report on Friday, July 17th. Two investment analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the stock. According to MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average target price of $16.71.

Red Cat Stock Performance

The firm has a fifty day moving average price of $8.33 and a 200 day moving average price of $10.40. The company has a market cap of $776.94 million, a price-to-earnings ratio of -7.81 and a beta of 1.35.

Red Cat (NASDAQ:RCAT) last posted its quarterly earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.21) by ($0.05). Red Cat had a negative return on equity of 32.25% and a negative net margin of 136.26%.The firm had revenue of $20.20 million for the quarter, compared to the consensus estimate of $22.65 million. On average, analysts expect that Red Cat Holdings, Inc. will post -0.79 EPS for the current fiscal year.

Insider Activity at Red Cat

In related news, CEO Jeffrey Thompson sold 150,000 shares of Red Cat stock in a transaction dated Tuesday, September 15th. The stock was sold at an average price of $7.74, for a total transaction of $1,161,000.00. Following the completion of the transaction, the chief executive officer owned 11,712,202 shares in the company, valued at approximately $90,652,443.48. This trade represents a 1.26% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Nicholas Liuzza, Jr. sold 55,000 shares of the business’s stock in a transaction that occurred on Tuesday, August 11th. The stock was sold at an average price of $10.63, for a total value of $584,650.00. Following the transaction, the director directly owned 489,874 shares in the company, valued at approximately $5,207,360.62. This trade represents a 10.09% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 225,000 shares of company stock worth $1,955,850. Insiders own 12.50% of the company’s stock.

Institutional Investors Weigh In On Red Cat

Several hedge funds have recently added to or reduced their stakes in RCAT. BlackRock Inc. acquired a new position in shares of Red Cat in the second quarter valued at $119,610,000. State Street Corp lifted its stake in shares of Red Cat by 68.8% during the 2nd quarter. State Street Corp now owns 12,091,447 shares of the company’s stock worth $128,774,000 after buying an additional 4,928,540 shares during the last quarter. Van ECK Associates Corp bought a new stake in shares of Red Cat during the 2nd quarter worth about $27,193,000. Renaissance Technologies LLC bought a new stake in shares of Red Cat during the 1st quarter worth about $18,533,000. Finally, CenterBook Partners LP grew its stake in Red Cat by 1,872.4% in the 4th quarter. CenterBook Partners LP now owns 1,105,132 shares of the company’s stock valued at $8,764,000 after buying an additional 1,049,101 shares during the last quarter. Institutional investors and hedge funds own 37.97% of the company’s stock.

About Red Cat

Red Cat Holdings, Inc is a drone technology company that develops and supplies small unmanned aircraft systems for military, government, public safety and commercial applications. Its solutions are designed to support intelligence, surveillance and reconnaissance, situational awareness, and other missions requiring portable and rapidly deployable aerial systems.

Through its Teal Drones business, Red Cat offers the Teal 2 and related Black Widow systems, compact drones designed for defense and public-safety users.