Red Cat, Ondas Miss Pentagon's Drone Dominance Round
RCAT sits 19% above its 52-week low of $5.77.
Summary
The Pentagon's Gauntlet II results are out, and both Red Cat's Teal Drones and Ondas' Ascent Aerosystems failed to place in the top five of their respective mission areas. Teal competed in Close Quarters Battle and did not make the cut, while Ascent missed in Deep Strike. This is a material setback for Red Cat, which had advanced to Gauntlet II in July and was hoping to secure a production contract; the company's stock is down 3.1% on the day and 24.4% since late August. Ondas is less affected, with its shares off 1.26% today. Both companies remain eligible for future Gauntlets, but the near-term revenue opportunity from this program is now off the table. Red Cat's Q2 revenue jumped 527% YoY to $20.2M, but the company is still burning cash and this loss removes a key growth catalyst. Watch for any contract awards to the ten finalists, which could signal which suppliers benefit.
At the time of this announcement, RCAT was trading at $6.84 on NASDAQ in the Technology sector, with a market capitalization of approximately $1B. The 52-week trading range was $5.77 to $18.78. This news item was assessed with negative market sentiment and an importance score of 7 out of 10. Source: Benzinga.