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Wednesday, May 18, 2022

Red Cat Holdings, Inc. (RCAT) stock declined in the Pre-market; here is why?

Announcing unaudited third quarter 2022 results, Red Cat Holdings, Inc. (RCAT) stock is down in the pre-market. At $2.03, RCAT’s stock price is down more than 8% from its previous closing price. The closing price of RCAT stock was $2.20 at the end of the last trading day. There were 2.65 million shares of RCAT stock traded in the previous trading session. The company’s current market cap is $118.44 million.


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RCAT: Q3 Highlights

  • Red Cat Holdings Q3 2022 revenue was $1.85 million, which was somewhat lower than the $2.1 million of Q3 2021 sales.
  • Net loss for RCAT in the third quarter of 2022 was roughly $2.5 million, lower than the net loss for the third quarter of 2021 of $8.9 million.
  • RCAT’s per-share loss in Q3 2022 was $0.05, whereas loss per share in Q3 2021 totaled $0.34.
  • It’s cash and cash equivalents were around $56 million as of the third quarter. 

RCAT: Major Achievements in Q3 2022

  • US Army selected Teal Drones for short-range reconnaissance Tranche 2 Drone Program
  • $90 million worth of customs and border protection contracts were awarded five years.
  • Teal manufacturing facility got doubled in size in Q3.  
  • Skypersonic and NASA are working together to launch drones that can be controlled remotely from various vehicles and locations.
  • Christopher R. Moe, a Venture Capitalist and Cargo Drone Entrepreneur, has been added to the Board of Directors.

RCAT CEO’s Remarks

Red Cat CEO Jeff Thompson believes all company segments are well-positioned to prosper in the present drone market. Due to the ongoing Ukrainian turmoil, inquiries for Teal’s Golden Eagle drone are increasing. A $1.5 million prototype contract for Short Range Reconnaissance Tranche 2, which may lead to a production contract, was granted to one of only two firms. This one was worth $100 million. Last but not least, Teal will be competing for Tranche 3 prototype and production honors. Enlarge Teal’s manufacturing capacity to satisfy existing and future orders.

Conclusion

Although the company has inked a couple of big contracts and announced a significant development in the business, RCAT still plunged into the pre-market. The reason is quite evident that its financial numbers are not in favor of the investors. Even if the profitability were negative, it would have positively affected the stock if its revenue growth was good.  

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