Red Cat Holdings (RCAT) AI Stock Analysis

• Market Cap: $885.73M
• Dividend Yield: N/A
• Average Volume (3M): 9.18M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.30
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: US
• Employees: 115
• Sector: Industrials
• Sector Strength: 72
• Industry: Computer Hardware
• EPS (TTM): -0.14
• Shares Outstanding: 119,371,140
• 10 Day Avg. Volume: 6,426,737
• 30 Day Avg. Volume: 9,177,941
• PEG Ratio: -0.13
• Price to Book (P/B): 19.62
• Price to Sales (P/S): 135.14
• P/FCF Ratio: -47.50
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 38.72
• Enterprise Value/Gross Profit: 4.48K
• Enterprise Value/Ebitda: -13.27
• 1Y Price Target: $15.00
• Price Target Upside: 102.16% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 43 Neutral
• Price Target: $7.00 ▼(-5.66% Downside)

The overall stock score is primarily influenced by financial performance challenges, including negative profitability and cash flow issues. Technical analysis indicates a bearish trend, further impacting the score. The absence of valuation metrics limits a comprehensive assessment.

Positive Factors

Strategic Partnerships

The partnership with AeroVironment enhances Red Cat's product deployment capabilities, potentially increasing market reach and operational versatility, which can lead to sustained growth in the defense and public safety sectors.

Product Innovation

The introduction of the FANG line of drones positions Red Cat to meet federal procurement standards, enhancing its competitive edge in defense and government markets, which can drive long-term revenue growth.

Recurring Revenue Streams

Red Cat's business model includes recurring revenue from maintenance and software subscriptions, providing a stable income stream that supports financial stability and long-term growth.

Negative Factors

Declining Revenue

The declining revenue trend indicates challenges in market demand or competitive positioning, which could hinder long-term financial performance and necessitate strategic adjustments.

Negative Profitability

Persistent negative profitability metrics highlight operational inefficiencies and cost management issues, which could impact the company's ability to invest in growth and innovation.

Cash Flow Issues

Negative cash flow indicates potential liquidity challenges, limiting Red Cat's ability to finance operations and strategic initiatives, which could affect long-term sustainability.

Red Cat Holdings Business Overview & Revenue Model

Company Description

Red Cat Holdings (RCAT) is a diversified technology company specializing in the drone industry, with a focus on providing innovative solutions for various sectors including public safety, defense, and commercial applications. The company operates through multiple subsidiaries that develop and manufacture drones, as well as providing software solutions and services that enhance drone capabilities and operational efficiency. Key products include advanced unmanned aerial vehicles (UAVs) and related technology aimed at enhancing situational awareness and data collection.

How the Company Makes Money

Red Cat Holdings generates revenue through several key streams including the sale of drones and UAV technology, software licensing for drone operations, and training and support services for customers. The company also benefits from strategic partnerships with public safety organizations and defense agencies, enabling it to secure contracts for specialized drone applications. Additionally, recurring revenue is generated through ongoing maintenance contracts and subscriptions for software services, which provide customers with continuous access to updates and support. The growing demand for drone technology in various industries, particularly in public safety and defense, continues to bolster the company's earnings.

Red Cat Holdings Financial Statement Overview

Summary

Red Cat Holdings shows strong revenue growth but faces significant profitability issues with negative margins and cash flows. The balance sheet indicates low leverage, but negative return on equity and consistent losses highlight financial challenges.

Income Statement

Red Cat Holdings shows significant revenue growth with a 75% increase in the TTM period. However, the company struggles with profitability, as indicated by negative gross, net, EBIT, and EBITDA margins. The net profit margin is particularly concerning at -6.79%, reflecting substantial losses.

Balance Sheet

The company's debt-to-equity ratio is relatively low at 0.23, suggesting manageable leverage. However, the return on equity is negative, indicating that the company is not generating profit from its equity base. The equity ratio is not provided, but the overall financial stability appears weak due to consistent losses.

Cash Flow

The cash flow analysis reveals a negative operating cash flow and free cash flow, although there is a notable improvement in free cash flow growth. The free cash flow to net income ratio is slightly above 1, indicating that cash flow is somewhat aligned with net income, but the overall cash flow position remains challenging.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	16.03M	7.28M	17.84M	4.62M	6.43M	5.00M
Gross Profit	138.67K	-2.03M	3.68M	-834.31K	925.51K	1.07M
EBITDA	-46.77M	-36.50M	-16.04M	-22.54M	-11.28M	-11.98M
Net Income	-65.75M	-65.42M	-24.05M	-28.11M	-11.69M	-13.24M
Balance Sheet
Total Assets	286.02M	55.60M	48.54M	60.74M	85.08M	11.69M
Cash, Cash Equivalents and Short-Term Investments	206.43M	9.15M	6.07M	15.99M	48.88M	277.35K
Total Debt	22.42M	1.97M	2.27M	2.97M	3.72M	2.02M
Total Liabilities	32.75M	5.48M	4.97M	5.98M	7.16M	6.43M
Stockholders Equity	253.27M	50.12M	43.56M	54.77M	77.92M	5.27M
Cash Flow
Free Cash Flow	-64.07M	-20.70M	-18.82M	-32.23M	-16.38M	-1.40M
Operating Cash Flow	-62.80M	-20.54M	-18.56M	-29.78M	-16.02M	-1.40M
Investing Cash Flow	-1.27M	4.24M	13.57M	29.59M	-46.60M	-48.37K
Financing Cash Flow	258.22M	19.39M	7.80M	-633.55K	66.43M	1.49M

Red Cat Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.42
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 7.42 is below the 20-day moving average (MA) of 7.88, below the 50-day MA of 10.35, and below the 200-day MA of 8.18, indicating a bearish trend. The MACD of -0.98 indicates Negative momentum. The RSI at 37.53 is Neutral, neither overbought nor oversold. The STOCH value of 82.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RCAT.

Red Cat Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TDY	72 Outperform	$23.45B	28.94	8.11%	―	7.41%	-12.85%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	61 Neutral	$12.85B	619.71	1.20%	―	14.00%	23.78%
AVAV	58 Neutral	$13.95B	―	-1.70%	―	44.04%	-129.81%
NNDM	50 Neutral	$345.01M	-1.49	-10.03%	―	42.17%	-215.37%
RCAT	43 Neutral	$885.73M	―	―	―	―	―
UAVS	40 Underperform	$55.81M	-0.08	-110.92%	―	-6.34%	98.60%

Red Cat Holdings Corporate Events

Red Cat Holdings Completes Successful Public Offering

On September 17, 2025, Red Cat Holdings entered into an underwriting agreement with Northland Securities for the public offering of 15,625,000 shares of common stock at $9.60 per share, with an option for underwriters to purchase an additional 2,343,750 shares, which was fully exercised. The offering closed on September 19, 2025, raising approximately $172.5 million in gross proceeds. The proceeds are intended for general corporate purposes, including investments in a new unmanned surface vessel division. Additionally, Lind Global Asset Management waived certain rights related to previous agreements with Red Cat in connection with this offering.

The most recent analyst rating on (RCAT) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Red Cat Holdings stock, see the RCAT Stock Forecast page.