Comparing Red Cat (NASDAQ:RCAT) & Park Aerospace (NYSE:PKE)

Red Cat (NASDAQ:RCAT) and Park Aerospace (NYSE:PKE) are both small-cap industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Institutional & Insider Ownership

38.0% of Red Cat shares are owned by institutional investors. Comparatively, 77.8% of Park Aerospace shares are owned by institutional investors. 12.5% of Red Cat shares are owned by insiders. Comparatively, 7.1% of Park Aerospace shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Red Cat and Park Aerospace’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%
Park Aerospace	18.42%	11.21%	10.25%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Red Cat and Park Aerospace, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	2	1	5	2	2.70
Park Aerospace	0	0	4	0	3.00

Red Cat currently has a consensus price target of $16.29, suggesting a potential upside of 251.74%. Park Aerospace has a consensus price target of $42.50, suggesting a potential upside of 65.05%. Given Red Cat’s higher possible upside, equities analysts plainly believe Red Cat is more favorable than Park Aerospace.

Risk and Volatility

Red Cat has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Park Aerospace has a beta of 0.39, suggesting that its stock price is 61% less volatile than the S&P 500.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$71.54 million	7.94	-$72.07 million	($0.81)	-5.72
Park Aerospace	$73.30 million	7.74	$11.27 million	$0.72	35.76

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

Summary

Park Aerospace beats Red Cat on 9 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 Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.