Cadre Holdings Plunges 13.7% Intraday: Earnings Beat vs. Guidance Fears Spark Volatility

Summary
• Cadre Holdings (CDRE) reports Q2 earnings of $0.30/share, beating estimates by 20%
• Revenue jumps 9% to $157.1M, outpacing consensus by 2.2%
• Shares plunge 10.6% as full-year guidance falls short of expectations

Today’s sharp selloff in Cadre Holdings reflects a stark disconnect between its strong quarterly performance and a weakened revenue outlook. With an intraday low of $28.86 and a 13.7% drop from the opening price, the stock’s volatility underscores investor skepticism over management’s revised guidance. The Security and Safety Services sector, however, remains in the top 30% of Zacks industries, highlighting CDRE’s divergence from broader industry resilience.

Weaker-Than-Expected Revenue Guidance Sparks Sharp Selloff
The 10.6% intraday drop in CDRE stems from a revised 2025 revenue forecast of $624–630M, below the $630.5M consensus. While Q2 results showed 9% revenue growth and 17.2% adjusted EBITDA margins, management cited shifting large-order timelines and new tariffs as headwinds. The Zacks Rank 4 (Sell) designation, driven by unfavorable earnings estimate revisions, further amplified the sell-off. Investors are now pricing in underperformance against the S&P 500’s 7.6% YTD gain, despite CDRE’s 2.4% rise since January.

Aerospace & Defense Sector Mixed as Cadre Trails Peers
The Aerospace & Defense sector, led by Lockheed Martin (LMT) with a 0.198% intraday gain, remains resilient amid global defense spending trends. However, CDRE’s 10.6% decline highlights its divergence from sector strength. While LMT’s 200-day average of $322.1 (above current price) suggests a bullish setup, CDRE’s 200-day average of $33.68 sits above its current $30.64, indicating bearish momentum. The Security and Safety Services industry’s top 30% Zacks ranking contrasts with CDRE’s Zacks Rank 4, underscoring its underperformance relative to peers.

Options Playbook: Capitalize on Volatility with Put/Call Pairs
• 200-day average: $33.68 (above)
• RSI: 64.98 (neutral)
• MACD: 0.135 (bullish)
• Bollinger Bands: $31.70–$34.26
• Support/Resistance: $32.14–$32.37

Technical indicators suggest CDRE is in a short-term bullish trend but faces resistance at $32.37. The 200-day average ($33.68) remains a critical level for long-term buyers. For options traders, two contracts stand out:

• CDRE20251017P30 (Put): Strike $30, Expiry 2025-10-17, IV 55.86%, Leverage 10.32%, Delta -0.44, Theta -0.0128, Gamma 0.0527. This put offers high leverage and moderate delta, ideal for a 5% downside scenario (projected price $29.10). Payoff: max(0, $29.10 - $30) = $0.90.
• CDRE20251017C30 (Call): Strike $30, Expiry 2025-10-17, IV 31.72%, Leverage 17.11%, Delta 0.539, Theta -0.0175, Gamma 0.0933. This call balances moderate IV with high gamma, suitable for a rebound above $32.37. Payoff: max(0, $32.37 - $30) = $2.37.

Aggressive bulls may consider CDRE20251017C30 into a bounce above $32.37, while bears should watch for a breakdown below $31.70.

Backtest Cadre Holdings Stock Performance
The performance of CDRE after a -14% intraday plunge has historically shown positive short-to-medium-term gains. The backtest data reveals that the 3-Day win rate is 55.95%, the 10-Day win rate is 56.46%, and the 30-Day win rate is 65.06%, indicating a higher probability of positive returns in the immediate aftermath of such a significant drop. The maximum return during the backtest period was 5.58%, which occurred on day 59, suggesting that there is potential for a strong recovery following a deep pullback.

Act Now: Position for Volatility as Cadre’s Guidance Clouds Short-Term Outlook
The selloff in CDRE reflects a short-term bearish bias, but technicals hint at potential rebounds above $32.37. With the Zacks Rank 4 and a weakened revenue outlook, investors should monitor management’s commentary on the August 6 earnings call. Meanwhile, the sector leader Arbor Realty Trust (ABR) is down 0.55%, signaling broader industry resilience. For now, prioritize CDRE20251017P30 for downside protection and CDRE20251017C30 for a rebound trade. Watch for a breakdown below $31.70 or a shift in earnings estimate revisions to gauge the next move.