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

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s share price gapped up before the market opened on Wednesday . The stock had previously closed at $9.77, but opened at $10.25. Red Cat shares last traded at $10.4030, with a volume of 6,174,692 shares changing hands.

Key Red Cat News

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

• Positive Sentiment: Red Cat’s maritime unit, Blue Ops, announced full-rate production of its U.S.-built Variant 7 uncrewed surface vessel, reinforcing the company’s growth story across air, land, and sea. Blue Ops Ramps into Full-Rate Production of U.S.-Built Variant 7
• Positive Sentiment: Analyst commentary remained supportive, with HC Wainwright reiterating a Buy rating and a $20 price target, suggesting meaningful upside from current levels. RCAT Stock Gets Wall Street Thumbs Up
• Positive Sentiment: Unusual options activity showed strong bullish speculation, with traders buying significantly more call options than usual. Traders Buy Large Volume of Call Options on Red Cat
• Neutral Sentiment: HC Wainwright also published long-range earnings estimates through FY2030, reflecting a view that Red Cat may remain loss-making near term but could improve over time as the business scales.
• Negative Sentiment: Despite the bullish news flow, Red Cat still faces near-term profitability pressure, with recent earnings missing estimates and analysts expecting continued losses in the next several quarters.

Wall Street Analysts Forecast Growth

A number of research firms have weighed in on RCAT. UBS Group assumed coverage on shares of Red Cat in a research note on Wednesday. They set a “buy” rating on the stock. Needham & Company LLC boosted their price target on shares of Red Cat from $16.00 to $20.00 and gave the stock a “buy” rating in a research report on Thursday, March 19th. Weiss Ratings reiterated a “sell (d-)” rating on shares of Red Cat in a research report on Tuesday, April 21st. Wall Street Zen downgraded shares of Red Cat from a “hold” rating to a “sell” rating in a research note on Saturday, May 2nd. Finally, HC Wainwright began coverage on shares of Red Cat in a research report on Wednesday. They set a “buy” rating and a $20.00 price target on the stock. Two equities research analysts have rated the stock with a Strong Buy rating, three have assigned a Buy rating and one has issued a Sell rating to the company. According to MarketBeat, Red Cat presently has a consensus rating of “Buy” and a consensus target price of $20.50.

Red Cat Trading Down 9.2%

The company’s 50-day moving average is $12.00 and its two-hundred day moving average is $11.40. The firm has a market cap of $1.58 billion, a P/E ratio of -18.20 and a beta of 1.21.

Red Cat (NASDAQ:RCAT) last posted its earnings results on Thursday, May 7th. The company reported ($0.22) earnings per share for the quarter, missing analysts’ consensus estimates of ($0.12) by ($0.10). The company had revenue of $15.47 million during the quarter, compared to the consensus estimate of $17.63 million. Red Cat had a negative net margin of 138.36% and a negative return on equity of 35.86%. The business’s revenue was up 849.1% compared to the same quarter last year. Research analysts anticipate that Red Cat Holdings, Inc. will post -0.65 EPS for the current fiscal year.

Institutional Inflows and Outflows

A number of large investors have recently made changes to their positions in RCAT. State Street Corp lifted its position in shares of Red Cat by 136.4% during the 4th quarter. State Street Corp now owns 6,612,153 shares of the company’s stock worth $52,434,000 after buying an additional 3,815,310 shares in the last quarter. Vanguard Group Inc. grew its stake in Red Cat by 9.0% in the 4th quarter. Vanguard Group Inc. now owns 6,000,037 shares of the company’s stock valued at $47,580,000 after purchasing an additional 493,660 shares during the period. Geode Capital Management LLC increased its position in shares of Red Cat by 13.4% during the 4th quarter. Geode Capital Management LLC now owns 2,520,524 shares of the company’s stock valued at $19,991,000 after purchasing an additional 297,967 shares during the last quarter. Brevan Howard Capital Management LP bought a new stake in shares of Red Cat during the 3rd quarter worth $19,739,000. Finally, Davidson Kempner Capital Management LP purchased a new position in shares of Red Cat in the 3rd quarter worth about $17,286,000. 37.97% of the stock is owned by institutional investors.

About Red Cat

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.