Red Cat (NASDAQ:RCAT) versus VirTra (NASDAQ:VTSI) Head-To-Head Contrast

Red Cat (NASDAQ:RCAT) and VirTra (NASDAQ:VTSI) are both small-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, dividends, valuation, institutional ownership and earnings.

Earnings and Valuation

This table compares Red Cat and VirTra”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$40.73 million	13.77	-$72.07 million	($0.81)	-5.64
VirTra	$17.50 million	1.71	$260,000.00	($0.26)	-10.18

VirTra has lower revenue, but higher earnings than Red Cat. VirTra is trading at a lower price-to-earnings ratio than Red Cat, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

38.0% of Red Cat shares are held by institutional investors. Comparatively, 14.7% of VirTra shares are held by institutional investors. 12.5% of Red Cat shares are held by company insiders. Comparatively, 3.5% of VirTra shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and price targets for Red Cat and VirTra, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	2	1	5	2	2.70
VirTra	1	1	1	0	2.00

Red Cat currently has a consensus target price of $16.71, suggesting a potential upside of 265.90%. VirTra has a consensus target price of $5.00, suggesting a potential upside of 88.96%. Given Red Cat’s stronger consensus rating and higher probable upside, analysts clearly believe Red Cat is more favorable than VirTra.

Profitability

This table compares Red Cat and VirTra’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Cat	-136.26%	-32.25%	-28.48%
VirTra	-17.04%	-6.59%	-4.57%

Volatility and Risk

Red Cat has a beta of 1.51, indicating that its stock price is 51% more volatile than the S&P 500. Comparatively, VirTra has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Summary

Red Cat beats VirTra on 10 of the 15 factors compared between the two stocks.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.

About VirTra

VirTra, Inc. provides use of force training and firearms training simulators for the law enforcement, military, and commercial markets worldwide. Its patented technologies, software, and scenarios provide intense training for de-escalation, judgmental use-of-force, marksmanship, and related training that mimics real-world situations. It offers V-300 simulator, a 300 degree wrap-around screen for simulation training; V-180 simulator, a 180 degree screen for smaller spaces or budgets; V-100, a single-screen based simulator system; V-100 MIL, a single-screen based simulator system; and V-ST PRO, a realistic single screen firearms shooting and skills training simulator. The company also provides Virtual Interactive Coursework Training Academy (V-VICTA), which enables law enforcement agencies to teach, train, test, and sustain departmental training requirements; and Subscription Training Equipment Partnership, a program that allows agencies to utilize its simulator products, accessories, and V-VICTA interactive coursework on a subscription basis. In addition, it offers V-Author software that allows users to create, edit, and train with content specific to agency’s objectives and environments; Simulated Recoil Kits, a range of realistic and reliable simulated recoil kits/weapons; Threat-Fire, a device that applies real-world stress on the trainees during simulation training; and TASER, an OC spray and low-light training devices that interact with its simulators for training. The company sells its simulators and related products through a direct sales force and distribution partners. The company was founded in 1993 and is headquartered in Chandler, Arizona.