Red Cat (NASDAQ:RCAT) Hits New 1-Year Low – Should You Sell?

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s share price reached a new 52-week low during mid-day trading on Thursday. The company traded as low as $4.41 and last traded at $4.5510, with a volume of 807,400 shares trading hands. The stock had previously closed at $4.58.

Wall Street Analyst Weigh In

A number of research firms have commented on RCAT. Northland Securities set a $13.00 price target on shares of Red Cat in a report on Thursday, September 17th. Needham & Company LLC reaffirmed a “buy” rating and issued a $15.00 price target on shares of Red Cat in a research note on Tuesday. Weiss Ratings reiterated a “sell (d-)” rating on shares of Red Cat in a report on Thursday, October 15th. HC Wainwright reiterated a “buy” rating and set a $20.00 price objective on shares of Red Cat in a report on Friday, August 7th. Finally, Zacks Research cut shares of Red Cat from a “hold” rating to a “strong sell” rating in a research report on Monday, October 12th. Two investment analysts have rated the stock with a Strong Buy rating, five have given a Buy rating, one has assigned a Hold rating and two have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $16.71.

Red Cat Stock Down 2.1%

The stock has a 50 day simple moving average of $7.42 and a 200 day simple moving average of $9.45. The stock has a market cap of $550.49 million, a price-to-earnings ratio of -5.54 and a beta of 1.51.

Red Cat (NASDAQ:RCAT) last issued its earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share for the quarter, missing analysts’ consensus estimates 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 analyst estimates of $22.65 million. Equities analysts expect that Red Cat Holdings, Inc. will post -0.79 earnings per share for the current year.

Insider Activity at Red Cat

In related news, Director Nicholas Liuzza, Jr. sold 55,000 shares of Red Cat stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $10.63, for a total value of $584,650.00. Following the completion of the sale, the director owned 489,874 shares of the company’s stock, valued at approximately $5,207,360.62. This trade represents a 10.09% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through the SEC website. Also, CEO Jeffrey Thompson sold 150,000 shares of the business’s stock in a transaction on Thursday, October 15th. The shares were sold at an average price of $4.51, for a total transaction of $676,500.00. Following the sale, the chief executive officer owned 11,562,202 shares of the company’s stock, valued at $52,145,531.02. This trade represents a 1.28% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 375,000 shares of company stock valued at $2,632,350. 12.50% of the stock is owned by company insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently made changes to their positions in the business. Wealth Management Partners LLC grew its holdings in shares of Red Cat by 108.6% during the third quarter. Wealth Management Partners LLC now owns 44,832 shares of the company’s stock valued at $290,000 after buying an additional 23,335 shares during the last quarter. Counterpoint Mutual Funds LLC acquired a new stake in shares of Red Cat in the 3rd quarter worth about $463,000. Morangie Management LLC acquired a new stake in shares of Red Cat in the 3rd quarter worth about $65,000. Bouvel Investment Partners LLC raised its holdings in shares of Red Cat by 117.9% in the 3rd quarter. Bouvel Investment Partners LLC now owns 165,537 shares of the company’s stock worth $1,069,000 after acquiring an additional 89,558 shares during the last quarter. Finally, Castle Rock Wealth Management LLC bought a new position in Red Cat in the 3rd quarter valued at about $68,000. 37.97% of the stock is currently owned by institutional investors and hedge funds.

About Red Cat

Red Cat Holdings, Inc is a drone technology company that develops and provides unmanned aircraft systems, software, and related services for defense, public safety, and commercial applications. Its solutions are designed to support intelligence, surveillance, reconnaissance, and situational-awareness missions in demanding operating environments.

Through its Teal Drones subsidiary, Red Cat offers small unmanned aircraft systems such as the Teal 2, a compact drone designed for nighttime operations and short-range reconnaissance.