Red Cat (NASDAQ:RCAT) Shares Gap Up – Should You Buy?

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s share price gapped up before the market opened on Friday . The stock had previously closed at $10.23, but opened at $11.37. Red Cat shares last traded at $10.9990, with a volume of 5,766,889 shares changing hands.

Key Red Cat News

Here are the key news stories impacting Red Cat this week:

• Positive Sentiment: Red Cat promoted Mitch McDonald to divisional CEO of its UAS operations, bringing Teal Drones and FlightWave Aerospace under unified leadership. The company said the move should improve coordination, manufacturing scale and execution as demand from U.S. and allied defense customers grows. Red Cat Promotes Mitch McDonald to Divisional CEO of its UAS Operations
• Neutral Sentiment: Weakness in fellow drone maker Ondas Holdings after its earnings report may be hurting sentiment across the drone-stock group. Ondas’ Israeli defense tender underscores demand for military drones, but it does not provide direct revenue to Red Cat. Ondas Drops 7% After Earnings
• Negative Sentiment: Red Cat directors reported substantial selling. Christopher R. Moe sold a combined 30,000 shares for approximately $310,600, while Nicholas Reyland Liuzza, Jr. sold 55,000 shares for about $584,650. The transactions reduced their holdings by roughly 13.4% and 10.1%, respectively, potentially raising concerns about insider conviction. Red Cat Insider Selling
• Negative Sentiment: Northland Securities lowered its third-quarter EPS forecast, signaling expectations for greater losses or weaker profitability. Red Cat’s latest quarter already missed consensus on both EPS and revenue, reporting a $0.26 loss per share versus an expected $0.21 loss and revenue of $20.2 million versus $22.65 million expected. Red Cat Q3 EPS Forecast Decreased

Analysts Set New Price Targets

RCAT has been the topic of several research reports. Wall Street Zen cut Red Cat from a “sell” rating to a “strong sell” rating in a research report on Saturday, July 18th. Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Red Cat in a research report on Friday, July 17th. LADENBURG THALM/SH SH upgraded shares of Red Cat to a “strong-buy” rating in a research note on Wednesday, May 6th. Clear Str raised shares of Red Cat to a “strong-buy” rating in a report on Wednesday, April 29th. Finally, HC Wainwright restated a “buy” rating and set a $20.00 target price on shares of Red Cat in a research report on Friday, August 7th. Two research analysts have rated the stock with a Strong Buy rating, four have assigned a Buy rating and one has issued a Sell rating to the stock. According to MarketBeat, Red Cat currently has a consensus rating of “Buy” and a consensus price target of $20.40.

Red Cat Trading Up 9.0%

The firm has a 50 day moving average price of $9.55 and a 200 day moving average price of $11.66. The stock has a market capitalization of $1.37 billion, a PE ratio of -13.62 and a beta of 1.31.

Red Cat (NASDAQ:RCAT) last released its earnings results 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 39.64%. The company had revenue of $20.20 million for the quarter, compared to analysts’ expectations of $22.65 million. On average, equities research analysts expect that Red Cat Holdings, Inc. will post -0.78 EPS for the current year.

Insiders Place Their Bets

In other news, Director Paul Funk II sold 165,028 shares of Red Cat stock in a transaction dated Thursday, June 11th. The stock was sold at an average price of $11.50, for a total transaction of $1,897,822.00. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. Also, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the business’s stock in a transaction that occurred 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 transaction, 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 ownership of the stock. The SEC filing for this sale provides additional information. Insiders sold a total of 240,028 shares of company stock worth $2,692,672 over the last quarter. 12.50% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Red Cat

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. Sanctuary Advisors LLC purchased a new position in Red Cat during the second quarter valued at approximately $117,000. Connor Clark & Lunn Investment Management Ltd. bought a new position in shares of Red Cat in the second quarter worth approximately $164,000. Quantbot Technologies LP purchased a new stake in shares of Red Cat in the second quarter worth $47,000. Fund Advisors of America Inc FL purchased a new stake in shares of Red Cat in the second quarter worth $377,000. Finally, Allworth Financial LP bought a new stake in shares of Red Cat during the 2nd quarter valued at $28,000. Institutional investors own 37.97% of the company’s stock.

Red Cat Company Profile

Red Cat Holdings, Inc (NASDAQ: RCAT) is a technology holding company that develops and delivers advanced robotics, autonomy, and sensing solutions for defense, national security, public safety and commercial customers. Headquartered in American Fork, Utah, the company brings together a portfolio of specialized operating businesses focused on unmanned aerial systems (UAS), mission management software, precision mapping sensors and engineering services.

Through its UAS segment, Red Cat designs and manufactures small to medium-sized fixed-wing and vertical-takeoff drones that support intelligence, surveillance and reconnaissance (ISR) missions.