Red Cat (NASDAQ:RCAT) Trading 6.2% Higher – Should You Buy?

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s stock price rose 6.2% during mid-day trading on Friday . The stock traded as high as $9.31 and last traded at $9.21. 10,143,291 shares were traded during mid-day trading, a decline of 27% from the average daily volume of 13,952,317 shares. The stock had previously closed at $8.67.

Red Cat News Roundup

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

• Positive Sentiment: HC Wainwright reaffirmed its Buy rating and maintained a $20 price target, implying substantial upside from the recent share price. The endorsement suggests the firm remains confident in Red Cat’s growth prospects. Benzinga article
• Positive Sentiment: Red Cat reported 527% year-over-year revenue growth for the second quarter. Gross margin rose 39% from the prior-year quarter and increased 27% sequentially, indicating improving operating performance and demand for its drone products. Business Insider article
• Neutral Sentiment: Management guided for fiscal 2026 revenue of $150 million to $180 million, broadly surrounding the $155.4 million analyst consensus. The range signals continued expansion but does not clearly represent a major forecast upgrade.
• Neutral Sentiment: Needham lowered its price target from $20 to $15 while retaining a Buy rating. The target reduction reflects more cautious valuation assumptions, though the firm still sees meaningful upside. The Fly article
• Negative Sentiment: Second-quarter results fell short of expectations: Red Cat reported an adjusted loss of $0.26 per share versus the expected $0.21 loss, while revenue of $20.2 million missed the $22.65 million consensus. The company remains deeply unprofitable, which could pressure the stock despite its growth rate. Zacks article

Wall Street Analysts Forecast Growth

Several equities analysts have recently issued reports on RCAT shares. Weiss Ratings reiterated a “sell (d-)” rating on shares of Red Cat in a report on Friday, July 17th. Roth Capital started coverage on shares of Red Cat in a report on Monday, June 1st. They set a “buy” rating and a $25.00 price target on the stock. UBS Group initiated coverage on Red Cat in a report on Wednesday, May 27th. They issued a “buy” rating for the company. Wall Street Zen cut shares of Red Cat from a “sell” rating to a “strong sell” rating in a report on Saturday, July 18th. Finally, Clear Str upgraded Red Cat to a “strong-buy” rating in a research report on Wednesday, April 29th. Two equities 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 company’s stock. According to data from MarketBeat, the company has an average rating of “Buy” and an average price target of $20.40.

Red Cat Trading Up 6.2%

The firm has a market cap of $1.13 billion, a PE ratio of -13.16 and a beta of 1.31. The firm’s 50 day simple moving average is $9.99 and its 200 day simple moving average is $11.85.

Red Cat (NASDAQ:RCAT) last issued its quarterly earnings data on Thursday, August 6th. The company reported ($0.26) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.21) by ($0.05). Red Cat had a negative return on equity of 35.86% and a negative net margin of 138.36%.The firm had revenue of $20.20 million for the quarter, compared to analysts’ expectations of $22.65 million. As a group, equities research analysts predict that Red Cat Holdings, Inc. will post -0.68 earnings per share for the current fiscal year.

Insider Activity

In other news, Director Paul Funk II sold 165,028 shares of Red Cat stock in a transaction that occurred on Thursday, June 11th. The stock was sold at an average price of $11.50, for a total value of $1,897,822.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. 12.50% of the stock is owned by insiders.

Hedge Funds Weigh In On Red Cat

A number of large investors have recently made changes to their positions in RCAT. BlackRock Inc. purchased a new position in Red Cat during the 2nd quarter valued at $119,610,000. State Street Corp increased its position in Red Cat by 136.4% during the 4th quarter. State Street Corp now owns 6,612,153 shares of the company’s stock valued at $52,434,000 after purchasing an additional 3,815,310 shares during the period. Vanguard Group Inc. raised its stake in Red Cat by 43.9% in the third quarter. Vanguard Group Inc. now owns 5,506,377 shares of the company’s stock worth $56,991,000 after buying an additional 1,680,929 shares in the last quarter. Davidson Kempner Capital Management LP bought a new position in shares of Red Cat in the 3rd quarter worth $17,286,000. Finally, Renaissance Technologies LLC bought a new position in Red Cat in the first quarter worth about $18,533,000. 37.97% of the stock is owned by hedge funds and other 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.