Red Cat Holdings Inc (NASDAQ:RCAT) stock is soaring today, up 20.2% at $13.87 at last glance, after Needham initiated coverage on the drone maker with a "buy" rating and $17 price target. The firm cited the industry's growth, with the unmanned aerial systems (UAS) industry entering what it described as a "multi-year supercycle."
RCAT is on track for its fifth-straight gain and largest daily percentage pop since Sept. 11, as the stock breaks into positive territory for 2025. The shares are also pushing past the $13 level, which rejected rallies in July and late September. Year over year, the shares are up 304.5%.
Call traders are chiming in on the bull note, with 48,000 calls exchanged so far today -- seven times the call volume typically seen at this point -- in comparison to 8,073 puts. The November 15 call is the most popular contract, followed by the October 15 call, with new positions being bought to open at the weekly 10/3 14.50-strike call that expires today.
Though short interest has begun to unwind, it still represents a large 18% of the stock's available float. It would take shorts roughly two days to cover, at RCAT's average pace of trading.
