Traders Buy Large Volume of Call Options on Red Cat (NASDAQ:RCAT)

Red Cat Holdings, Inc. (NASDAQ:RCAT) saw some unusual options trading on Thursday. Stock traders acquired 54,752 call options on the company. This is an increase of approximately 82% compared to the typical volume of 30,054 call options.

Wall Street Analyst Weigh In

A number of research firms have recently weighed in on RCAT. UBS Group began coverage on Red Cat in a research note on Wednesday. They issued a “buy” rating for the company. Wall Street Zen lowered Red Cat from a “hold” rating to a “sell” rating in a research note on Saturday, May 2nd. Needham & Company LLC upped their price target on Red Cat from $16.00 to $20.00 and gave the company a “buy” rating in a research report on Thursday, March 19th. Clear Str raised Red Cat to a “strong-buy” rating in a research report on Wednesday, April 29th. Finally, Weiss Ratings reaffirmed a “sell (d-)” rating on shares of Red Cat in a research report on Tuesday, April 21st. Two research analysts have rated the stock with a Strong Buy rating, three have given a Buy rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat.com, Red Cat has an average rating of “Buy” and a consensus target price of $20.50.

Red Cat Stock Performance

Shares of NASDAQ:RCAT opened at $14.15 on Friday. The firm has a market capitalization of $1.74 billion, a P/E ratio of -20.21 and a beta of 1.21. The stock has a 50 day moving average price of $12.00 and a 200-day moving average price of $11.40. Red Cat has a 52-week low of $5.71 and a 52-week high of $18.78.

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

Hedge Funds Weigh In On Red Cat

A number of institutional investors have recently added to or reduced their stakes in RCAT. State Street Corp raised its holdings in Red Cat by 136.4% in the fourth quarter. State Street Corp now owns 6,612,153 shares of the company’s stock worth $52,434,000 after purchasing an additional 3,815,310 shares in the last quarter. Brevan Howard Capital Management LP bought a new position in Red Cat in the third quarter worth $19,739,000. Vanguard Group Inc. increased its position in Red Cat by 43.9% during the 3rd quarter. Vanguard Group Inc. now owns 5,506,377 shares of the company’s stock valued at $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 Red Cat during the 3rd quarter valued at approximately $17,286,000. Finally, Renaissance Technologies LLC bought a new position in Red Cat during the 1st quarter valued at approximately $18,533,000. Institutional investors own 37.97% of the company’s stock.

Key Headlines Impacting Red Cat

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

• Positive Sentiment: Wall Street sentiment improved after HC Wainwright initiated coverage with a Buy rating and a $20 price target, implying meaningful upside from recent levels. RCAT Stock Gets Wall Street Thumbs Up – This Analyst Sees Upside Potential Of Nearly 100% From Current Levels
• Positive Sentiment: Investor enthusiasm for U.S. drone names increased after reports that the Trump administration is discussing funding support for domestic drone makers, including possible federal equity stakes, which boosted the whole group. Drone Stock Takes Off as Trump Administration Buzz Builds
• Positive Sentiment: Red Cat’s maritime unit, Blue Ops, announced it is moving the Variant 7 uncrewed surface vessel into full-rate production, reinforcing the company’s execution story across air, land, and sea autonomy platforms. Blue Ops Ramps into Full-Rate Production of U.S.-Built Variant 7, Advancing Red Cat’s Autonomy Stack Across Air, Land and Sea
• Positive Sentiment: Unusual call option activity suggested traders were positioning for further upside, adding to the momentum in RCAT shares.
• Neutral Sentiment: Recent hedge fund filings showed several large institutional holders added to positions, which supports the stock’s ownership base but is not a direct near-term fundamental catalyst.

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.