Red Cat (NASDAQ:RCAT) Shares Down 8.7% – Should You Sell?

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

Analysts Set New Price Targets

Several equities research analysts have recently issued reports on the stock. Piper Sandler initiated coverage on shares of Red Cat in a research report on Wednesday, September 2nd. They set a “neutral” rating and a $9.00 price objective for the company. HC Wainwright reissued a “buy” rating and issued a $20.00 target price on shares of Red Cat in a report on Friday, August 7th. Wall Street Zen cut Red Cat from a “sell” rating to a “strong sell” rating in a research note on Saturday, July 18th. Weiss Ratings restated a “sell (d-)” rating on shares of Red Cat in a research note on Friday, July 17th. Finally, Needham & Company LLC decreased their price target on Red Cat from $20.00 to $15.00 and set a “buy” rating for the company in a report on Friday, August 7th. Two analysts have rated the stock with a Strong Buy rating, five have assigned a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $16.71.

Red Cat Trading Down 8.7%

The firm’s fifty day moving average price is $8.01 and its 200-day moving average price is $9.79. The firm has a market cap of $580.56 million, a price-to-earnings ratio of -5.84 and a beta of 1.51.

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

Insiders Place Their Bets

In other Red Cat news, CEO Jeffrey Thompson sold 150,000 shares of the firm’s stock in a transaction on Tuesday, September 15th. The shares were sold at an average price of $7.74, for a total transaction of $1,161,000.00. Following the transaction, the chief executive officer directly 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 position. The sale was disclosed in a document filed with the SEC, which is available at 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 Red Cat stock in a transaction on Tuesday, August 11th. The shares were sold at an average price of $10.63, for a total transaction of $584,650.00. Following the completion of the transaction, the director owned 489,874 shares in the company, valued at approximately $5,207,360.62. This represents a 10.09% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. In the last three months, insiders have sold 225,000 shares of company stock valued at $1,955,850. Insiders own 12.50% of the company’s stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently modified their holdings of the stock. State Street Corp grew its position in Red Cat by 68.8% in the 2nd quarter. State Street Corp now owns 12,091,447 shares of the company’s stock valued at $128,774,000 after buying an additional 4,928,540 shares during the last quarter. BlackRock Inc. purchased a new position in Red Cat during the 2nd quarter worth $119,610,000. Van ECK Associates Corp purchased a new position in Red Cat during the 2nd quarter worth $27,193,000. Renaissance Technologies LLC purchased a new position in Red Cat during the 1st quarter worth $18,533,000. Finally, AWM Investment Company Inc. purchased a new position in Red Cat during the 2nd quarter worth $9,313,000. 37.97% of the stock is currently owned by hedge funds and other institutional investors.

About Red Cat

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.