Red Cat (NASDAQ:RCAT) Stock Falls 8.7% – Should You Sell?

Shares of Red Cat Holdings, Inc. (NASDAQ:RCAT) traded down 8.7% on Wednesday. The stock traded as low as $4.72 and last traded at $4.73. Approximately 8,267,131 shares traded hands during trading, a decline of 34% from the average daily volume of 12,582,865 shares. The stock had previously closed at $5.18.

Analyst Upgrades and Downgrades

RCAT has been the topic of several recent research reports. Evercore assumed coverage on shares of Red Cat in a research note on Monday, August 31st. They issued an “outperform” rating and a $15.00 price objective on the stock. Zacks Research cut shares of Red Cat from a “hold” rating to a “strong sell” rating in a report on Monday. Wall Street Zen cut shares of Red Cat from a “sell” rating to a “strong sell” rating in a report on Saturday, July 18th. Northland Securities set a $13.00 price target on shares of Red Cat in a research report on Thursday, September 17th. Finally, Piper Sandler started coverage on Red Cat in a report on Wednesday, September 2nd. They issued a “neutral” rating and a $9.00 price target on the stock. Two investment analysts have rated the stock with a Strong Buy rating, five have issued a Buy rating, one has assigned a Hold rating and two have issued a Sell rating to the stock. Based on data from MarketBeat, the stock presently has an average rating of “Moderate Buy” and an average target price of $16.71.

Red Cat Price Performance

The stock’s fifty day moving average price is $7.86 and its 200-day moving average price is $9.67. The firm has a market cap of $576.26 million, a price-to-earnings ratio of -5.79 and a beta of 1.51.

Red Cat (NASDAQ:RCAT) last released its earnings results on Thursday, August 6th. The company reported ($0.26) earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of ($0.21) by ($0.05). The business had revenue of $20.20 million during the quarter, compared to analysts’ expectations of $22.65 million. Red Cat had a negative net margin of 136.26% and a negative return on equity of 32.25%. As a group, equities research analysts predict that Red Cat Holdings, Inc. will post -0.79 EPS for the current fiscal year.

Insider Transactions at Red Cat

In related news, CEO Jeffrey Thompson sold 150,000 shares of Red Cat stock in a transaction on 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 sale, the chief executive officer owned 11,712,202 shares of the company’s stock, 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 Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Nicholas Liuzza, Jr. sold 55,000 shares of the company’s stock in a transaction dated Tuesday, August 11th. The stock was sold at an average price of $10.63, for a total value of $584,650.00. Following the completion of the transaction, the director directly owned 489,874 shares in the company, valued at approximately $5,207,360.62. The trade was a 10.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 225,000 shares of company stock valued at $1,955,850. 12.50% of the stock is owned by insiders.

Hedge Funds Weigh In On Red Cat

A number of hedge funds have recently added to or reduced their stakes in RCAT. State Street Corp increased its position in Red Cat by 68.8% during the second 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. BlackRock Inc. bought a new stake in shares of Red Cat in the 2nd quarter worth approximately $119,610,000. Van ECK Associates Corp acquired a new stake in shares of Red Cat during the 2nd quarter worth approximately $27,193,000. Renaissance Technologies LLC acquired a new stake in shares of Red Cat during the 1st quarter worth approximately $18,533,000. Finally, AWM Investment Company Inc. acquired a new stake in shares of Red Cat during the 2nd quarter worth approximately $9,313,000. Institutional investors and hedge funds own 37.97% of the company’s stock.

Red Cat Company Profile

Red Cat Holdings, Inc is a drone technology company that develops and supplies unmanned aircraft systems for defense, government, public safety and commercial applications. The company focuses on autonomous and remotely operated aerial systems designed to support intelligence, surveillance and reconnaissance missions, including operations in contested or GPS-denied environments.

Red Cat’s product portfolio includes the Teal 2 small unmanned aircraft system, a compact drone designed for close-range reconnaissance and situational awareness.