Red Cat Holdings (RCAT) AI Stock Analysis

• Market Cap: $601.92M
• Dividend Yield: N/A
• Average Volume (3M): 4.81M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.61
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 115
• Sector: Technology
• Sector Strength: 82
• Industry: Computer Hardware
• EPS (TTM): -0.27
• Shares Outstanding: 90,515,000
• 10 Day Avg. Volume: 5,081,933
• 30 Day Avg. Volume: 4,808,642
• PEG Ratio: 0.68
• Price to Book (P/B): 16.72
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -27.50
• Enterprise Value/Market Cap: 0.91
• Enterprise Value/Revenue: 8.16
• Enterprise Value/Gross Profit: 303.58
• Enterprise Value/Ebitda: -5.71
• 1Y Price Target: $13.00
• Price Target Upside: 100.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Red Cat Holdings exhibits strong revenue growth and strategic advancements, particularly in drone technology and international markets. However, persistent profitability issues, negative cash flows, and valuation concerns impact the overall score. Addressing operational inefficiencies and improving cash flow are essential for enhancing financial stability.

Red Cat Holdings Business Overview & Revenue Model

Company Description

Red Cat Holdings, Inc., through its subsidiaries, provides various products, services, and solutions to the drone industry. It offers commercial and government unmanned aerial vehicle technology for reconnaissance, public safety, and inspection applications. The company also provides First Person View (FPV) video goggles; and software and hardware solutions that enable drones to complete inspection services in locations where global positioning systems are not available. In addition, it is involved in the sales of FPV drones and equipment primarily to the consumer marketplace. Red Cat Holdings, Inc.is based in San Juan, Puerto Rico.

How the Company Makes Money

Red Cat Holdings generates revenue primarily through the sale of drones and related technology solutions. Its revenue model includes direct sales of drone hardware, software subscriptions for its flight operations management platforms, and data analytics services. The company also earns money through strategic partnerships and collaborations with other technology firms, which help in expanding its product offerings and market reach. Additionally, Red Cat Holdings may engage in licensing agreements for its proprietary technology, contributing to its income stream. The company's focus on innovation and regulatory compliance positions it well within the growing UAS market, attracting both commercial and governmental clients.

Red Cat Holdings Financial Statement Overview

Summary

Red Cat Holdings shows strong revenue growth but faces significant challenges with profitability and cash flow. The balance sheet indicates a stable equity position, but operational inefficiencies and negative cash flows are concerning. Addressing these issues is critical for financial health and investor confidence.

Income Statement

Red Cat Holdings has shown significant revenue growth over the years, with the latest TTM revenue at $16.47 million, indicating a positive trajectory. However, the company is struggling with negative profitability margins, including a net profit margin of -232.6% and a gross profit margin of 10.9% in the TTM period. The EBIT margin is also significantly negative at -160.4%, highlighting operational inefficiencies. These challenges weigh down the overall income statement score.

Balance Sheet

The company's balance sheet shows moderate financial structure with a debt-to-equity ratio of 0.51, indicating a manageable level of leverage. However, the return on equity is negative due to consistent net losses, which is a concern. The equity ratio stands at 52.9%, demonstrating a relatively stable capital structure despite the high liabilities. Overall, the balance sheet reflects a balance between financial risk and stability.

Cash Flow

The cash flow statement reveals challenges with consistently negative operating and free cash flows, with the TTM free cash flow at -$19.52 million. This highlights issues in generating cash from core operations. The company has been relying on financing activities to support cash needs. The operating cash flow to net income ratio is slightly positive, indicating some alignment between reported earnings and cash flow, but overall cash flow performance is weak.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
16.47M	17.84M	9.91M	6.43M	5.00M	403.94K
	Gross Profit
1.80M	3.68M	-336.80K	925.51K	1.07M	78.56K
	EBIT
-26.41M	-19.30M	-27.13M	-13.00M	-4.88M	-1.66M
	EBITDA
-26.95M	-17.46M	-25.29M	-11.28M	-11.98M	-1.66M
	Net Income Common Stockholders
-38.31M	-24.05M	-27.09M	-10.38M	-14.45M	-1.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
38.71K	6.07M	16.07M	48.88M	277.35K	236.67K
	Total Assets
262.39K	48.54M	60.19M	85.08M	11.69M	2.81M
	Total Debt
2.06M	2.27M	2.08M	2.97M	2.02M	568.77K
	Net Debt
2.05M	-3.80M	-1.18M	-1.11M	1.74M	332.10K
	Total Liabilities
2.77M	4.97M	5.58M	7.16M	6.43M	1.28M
	Stockholders Equity
-2.51M	43.56M	54.61M	77.92M	5.27M	1.53M
Cash Flow		Free Cash Flow
-19.52M	-18.85M	-31.65M	-16.38M	-1.40M	-811.58K
	Operating Cash Flow
-19.28M	-18.60M	-29.20M	-16.02M	-1.40M	-811.58K
	Investing Cash Flow
7.78M	13.57M	29.59M	-46.60M	-48.37K	46.33K
	Financing Cash Flow
14.69M	7.80M	-1.22M	66.43M	1.49M	498.49K

Red Cat Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.49
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCAT, the sentiment is Positive. The current price of 6.49 is above the 20-day moving average (MA) of 5.50, above the 50-day MA of 5.69, and above the 200-day MA of 5.88, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 59.08 is Neutral, neither overbought nor oversold. The STOCH value of 80.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCAT.

Red Cat Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CRSR	66 Neutral	$924.88M	―	-15.20%	―	-6.53%	-1059.95%
Sector *	60 Neutral	$11.64B	10.63	-6.94%	2.93%	7.63%	-11.15%
SSYS	59 Neutral	$793.41M	―	-13.00%	―	-9.29%	17.86%
MKFG	49 Neutral	$98.34M	―	-68.97%	―	-9.27%	19.30%
RCAT	48 Neutral	$601.92M	―	-100.48%	―	―	―
NNDM	47 Neutral	$348.59M	―	-9.36%	―	―	―
DDD	37 Underperform	$255.09M	―	-99.85%	―	-8.09%	22.06%

Red Cat Holdings Corporate Events

Red Cat Holdings Appoints Interim CFO Jeffrey Thompson

Red Cat Holdings, Inc. announced the appointment of Jeffrey Thompson, its CEO and Chairman, as Interim Chief Financial Officer starting March 17, 2025, until the filing of the company’s annual report. Thompson, who has been with the company since 2019, will not receive additional compensation for this role. On March 11, 2025, Christian Koji Ericson was appointed as the new Chief Financial Officer, effective after the annual report filing. Ericson brings extensive finance and accounting experience, having previously worked at Western Steel Buildings and PricewaterhouseCoopers. His compensation package includes a $230,000 annual salary, potential bonuses, and a one-time equity award.