Analyzing V2X (NYSE:VVX) & Red Cat (NASDAQ:RCAT)
by Mitch Edgeman · The Markets DailyRed Cat (NASDAQ:RCAT – Get Free Report) and V2X (NYSE:VVX – Get Free Report) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.
Insider & Institutional Ownership
38.0% of Red Cat shares are owned by institutional investors. Comparatively, 95.2% of V2X shares are owned by institutional investors. 12.5% of Red Cat shares are owned by company insiders. Comparatively, 1.0% of V2X shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Valuation & Earnings
This table compares Red Cat and V2X”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Red Cat | $40.73 million | 24.88 | -$72.07 million | ($0.81) | -10.19 |
| V2X | $4.48 billion | 0.53 | $77.88 million | $2.90 | 25.92 |
V2X has higher revenue and earnings than Red Cat. Red Cat is trading at a lower price-to-earnings ratio than V2X, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Red Cat and V2X’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% |
| V2X | 1.88% | 17.52% | 6.00% |
Analyst Recommendations
This is a breakdown of recent ratings for Red Cat and V2X, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Red Cat | 1 | 1 | 5 | 2 | 2.89 |
| V2X | 1 | 7 | 6 | 0 | 2.36 |
Red Cat presently has a consensus target price of $18.00, indicating a potential upside of 118.05%. V2X has a consensus target price of $86.90, indicating a potential upside of 15.63%. Given Red Cat’s stronger consensus rating and higher possible upside, analysts clearly believe Red Cat is more favorable than V2X.
Volatility and Risk
Red Cat has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, V2X has a beta of 0.17, meaning that its share price is 83% less volatile than the S&P 500.
Summary
V2X 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 V2X
V2X, Inc. provides critical mission solutions and support services to defense clients worldwide. It offers a suite of integrated solutions across the operations and logistics, aerospace, training, and technology markets to national security, defense, civilian, and international clients. The company was incorporated in 2014 and is headquartered in Mclean, Virginia.