Head-To-Head Analysis: Rapid7 (NASDAQ:RPD) & Red Cat (NASDAQ:RCAT)

Rapid7 (NASDAQ:RPD) and Red Cat (NASDAQ:RCAT) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, institutional ownership, risk, analyst recommendations, dividends, valuation and profitability.

Valuation & Earnings

This table compares Rapid7 and Red Cat”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rapid7	$833.01 million	3.16	-$149.26 million	$0.63	66.14
Red Cat	$17.84 million	16.15	-$24.05 million	($0.46)	-8.30

Red Cat has lower revenue, but higher earnings than Rapid7. Red Cat is trading at a lower price-to-earnings ratio than Rapid7, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Rapid7 has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500. Comparatively, Red Cat has a beta of -0.07, suggesting that its share price is 107% less volatile than the S&P 500.

Institutional & Insider Ownership

95.7% of Rapid7 shares are held by institutional investors. Comparatively, 38.0% of Red Cat shares are held by institutional investors. 2.6% of Rapid7 shares are held by company insiders. Comparatively, 21.5% of Red Cat shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Rapid7 and Red Cat’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rapid7	5.65%	-128.95%	5.58%
Red Cat	-162.50%	-66.19%	-58.99%

Analyst Ratings

This is a breakdown of current ratings and price targets for Rapid7 and Red Cat, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rapid7	0	14	6	0	2.30
Red Cat	0	0	1	0	3.00

Rapid7 presently has a consensus target price of $44.59, indicating a potential upside of 7.00%. Red Cat has a consensus target price of $4.00, indicating a potential upside of 4.71%. Given Rapid7’s higher possible upside, research analysts plainly believe Rapid7 is more favorable than Red Cat.

Summary

Rapid7 beats Red Cat on 9 of the 14 factors compared between the two stocks.

About Rapid7

Rapid7, Inc. provides cybersecurity solutions under the Rapid7, Nexpose, and Metasploit brand names. The company offers endpoint to cloud data collection and sharing applications, such as Rapid7 Insight Agent, a software-based agent that is used on assets across on-premises and cloud environments to centralize and monitor data on company's platform; Rapid7 Insight Network Sensor that analyzes raw end-to-end network traffic to increase visibility into user activity, pinpoint real threats, and investigations; Rapid7 Cloud Event Data Harvesting that offers visibility into changes made to cloud resources; and third-party integrations and ecosystem, as well as orchestration and automation solutions. It also offers various platforms, including Rapid7 managed threat complete consisting of managed detection response that delivers end-to-end threat detection and response, as well as offloads day-to-day vulnerability management operations. In addition, it provides Rapid7 threat complete consisting of InsightIDR, a security information and event management, and extended detection and response solution; and InsightVM, a vulnerability management solution that provides visibility across on-premise and remote endpoints for security teams to evaluate the business risks, and configurations, and share with their IT counterparts for remediation. Further, the company offers Rapid7 cloud risk complete, which includes InsightCloudSec, a cloud risk and compliance management solution; and InsightAppSec, a dynamic application security testing tool. It also provides professional services. It serves a range of industries, including business services, pharmaceuticals, technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, travel and transportation, government, online services, telecommunications, and professional services. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.

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.