Red Cat (NASDAQ:RCAT) Shares Gap Up – Here’s Why

Shares of Red Cat Holdings, Inc. (NASDAQ:RCAT) gapped up prior to trading on Monday. The stock had previously closed at $4.72, but opened at $5.12. Red Cat shares last traded at $4.6950, with a volume of 1,485,329 shares trading hands.

Analyst Ratings Changes

RCAT has been the topic of several analyst reports. Zacks Research lowered Red Cat from a “hold” rating to a “strong sell” rating in a report on Monday, October 12th. Needham & Company LLC lowered their price target on shares of Red Cat from $20.00 to $15.00 and set a “buy” rating on the stock in a report on Friday, August 7th. Wall Street Zen lowered shares of Red Cat from a “sell” rating to a “strong sell” rating in a research report on Saturday, July 18th. Northland Securities set a $13.00 price objective on shares of Red Cat in a report on Thursday, September 17th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Red Cat in a report on Thursday. Two 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 given a Sell rating to the company’s stock. Based on data from MarketBeat.com, the stock has a consensus rating of “Moderate Buy” and a consensus price target of $16.71.

Red Cat Price Performance

The firm has a fifty day simple moving average of $7.77 and a 200 day simple moving average of $9.62. The company has a market capitalization of $583.63 million, a price-to-earnings ratio of -5.88 and a beta of 1.51.

Red Cat (NASDAQ:RCAT) last issued its quarterly 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). The company 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%. Research analysts predict that Red Cat Holdings, Inc. will post -0.79 EPS for the current year.

Insiders Place Their Bets

In related news, Director Nicholas Reyland Liuzza, Jr. sold 55,000 shares of the company’s stock in a transaction dated 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 represents a 10.09% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which can be accessed through this link. Also, CEO Jeffrey M. Thompson sold 150,000 shares of the firm’s stock in a transaction dated 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 sale, the chief executive officer owned 11,712,202 shares of the company’s stock, valued at approximately $90,652,443.48. The trade was a 1.26% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 225,000 shares of company stock valued at $1,955,850 in the last three months. 12.50% of the stock is currently owned by insiders.

Institutional Trading of Red Cat

Several hedge funds have recently made changes to their positions in RCAT. CoreCap Advisors LLC increased its holdings in shares of Red Cat by 13.8% during the 2nd quarter. CoreCap Advisors LLC now owns 9,039 shares of the company’s stock worth $96,000 after buying an additional 1,095 shares during the last quarter. Western Wealth Management LLC lifted its holdings in Red Cat by 4.5% in the first quarter. Western Wealth Management LLC now owns 36,722 shares of the company’s stock valued at $481,000 after acquiring an additional 1,570 shares during the last quarter. Cambridge Investment Research Advisors Inc. lifted its holdings in Red Cat by 1.2% in the second quarter. Cambridge Investment Research Advisors Inc. now owns 140,804 shares of the company’s stock valued at $1,500,000 after acquiring an additional 1,608 shares during the last quarter. Wealthfront Advisers LLC grew its position in Red Cat by 15.7% in the first quarter. Wealthfront Advisers LLC now owns 12,959 shares of the company’s stock worth $170,000 after acquiring an additional 1,754 shares during the period. Finally, The Manufacturers Life Insurance Company raised its position in Red Cat by 4.2% in the second quarter. The Manufacturers Life Insurance Company now owns 49,008 shares of the company’s stock valued at $522,000 after purchasing an additional 1,961 shares during the period. Hedge funds and other institutional investors 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.