Red Cat (NASDAQ:RCAT – Get Free Report) and DeFi Technologies (NASDAQ:DEFT – Get Free Report) are both small-cap business services companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, profitability, risk, dividends, earnings and analyst recommendations.
Analyst Ratings
This is a summary of current ratings and price targets for Red Cat and DeFi Technologies, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Red Cat | 1 | 0 | 4 | 2 | 3.00 |
| DeFi Technologies | 0 | 1 | 4 | 0 | 2.80 |
Red Cat presently has a consensus target price of $21.40, suggesting a potential upside of 104.98%. DeFi Technologies has a consensus target price of $2.00, suggesting a potential upside of 277.36%. Given DeFi Technologies’ higher possible upside, analysts plainly believe DeFi Technologies is more favorable than Red Cat.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Red Cat | $40.73 million | 31.46 | -$72.07 million | ($0.70) | -14.91 |
| DeFi Technologies | $99.14 million | 2.07 | $62.41 million | $0.10 | 5.30 |
DeFi Technologies has higher revenue and earnings than Red Cat. Red Cat is trading at a lower price-to-earnings ratio than DeFi Technologies, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Red Cat has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, DeFi Technologies has a beta of 3.81, suggesting that its share price is 281% more volatile than the S&P 500.
Profitability
This table compares Red Cat and DeFi Technologies’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Red Cat | -138.36% | -35.86% | -31.04% |
| DeFi Technologies | 56.94% | 42.24% | 5.73% |
Institutional & Insider Ownership
38.0% of Red Cat shares are held by institutional investors. 12.5% of Red Cat shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
DeFi Technologies beats Red Cat on 9 of the 14 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 DeFi Technologies
DeFi Technologies, Inc. engages in the provision of investment services. It plans to acquire equity, debt, or other securities of publicly traded or private companies or other entities. The firm offers DeFi ETNs, DeFi Governance, DeFi Venture and DeFi Treasury. The company was founded by Olivier Francois Roussy Newton and Wouter Witvoet on April 14, 1986 and is headquartered in Toronto, Canada.
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