Red Cat (NASDAQ:RCAT) & Park Aerospace (NYSE:PKE) Financial Comparison

Red Cat (NASDAQ:RCAT) and Park Aerospace (NYSE:PKE) are both small-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

38.0% of Red Cat shares are owned by institutional investors. Comparatively, 77.8% of Park Aerospace shares are owned by institutional investors. 12.5% of Red Cat shares are owned by insiders. Comparatively, 7.1% of Park Aerospace shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Red Cat and Park Aerospace’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Red Cat	-136.26%	-32.25%	-28.48%
Park Aerospace	18.42%	11.21%	10.25%

Volatility & Risk

Red Cat has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Park Aerospace has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Valuation & Earnings

This table compares Red Cat and Park Aerospace”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Red Cat	$71.54 million	7.94	-$72.07 million	($0.81)	-5.72
Park Aerospace	$73.30 million	7.74	$11.27 million	$0.72	35.76

Park Aerospace has higher revenue and earnings than Red Cat. Red Cat is trading at a lower price-to-earnings ratio than Park Aerospace, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and target prices for Red Cat and Park Aerospace, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Red Cat	2	1	5	2	2.70
Park Aerospace	0	0	4	0	3.00

Red Cat presently has a consensus target price of $16.29, suggesting a potential upside of 251.74%. Park Aerospace has a consensus target price of $42.50, suggesting a potential upside of 65.05%. Given Red Cat’s higher probable upside, equities analysts clearly believe Red Cat is more favorable than Park Aerospace.

Summary

Park Aerospace beats Red Cat on 9 of the 15 factors compared between the two stocks.

About Red Cat

Red Cat Holdings, Inc. engages in the provision of various products, services, and solutions to the drone industry. The company operates through two segments: Enterprise and Consumer. It built infrastructure to manages drone fleets and fly, and provide services remotely, navigate confined industrial interior spaces and dangerous military environment. Red Cat Holdings, Inc. is based in San Juan, Puerto Rico.

About Park Aerospace

Park Aerospace Corp., an aerospace company, develops and manufactures solution and hot-melt advanced composite materials used to produce composite structures for the aerospace market in North America, Asia, and Europe. It offers advanced composite materials, including film adhesives and lightning strike protection materials that are used to produce primary and secondary structures for jet engines, large and regional transport aircrafts, military aircrafts, unmanned aerial vehicles, business jets, general aviation aircrafts, and rotary wing aircrafts. The company also provides specialty ablative materials for rocket motors and nozzles; and specially designed materials for radome applications. In addition, it designs and fabricates composite parts, structures and assemblies, and low volume tooling for the aerospace industry. The company was formerly known as Park Electrochemical Corp. and changed its name to Park Aerospace Corp. in July 2019. Park Aerospace Corp. was incorporated in 1954 and is based in Westbury, New York.