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Red Cat Holdings Inc (RCAT)
NASDAQ:RCAT
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Red Cat Holdings
(NASDAQ:RCAT)
Rating:54Neutral
Price Target:
$6.50
▼(-26.14%Downside)
Red Cat Holdings (RCAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$741.87M
Dividend YieldN/A
Average Volume (3M)6.10M
Price to Earnings (P/E)―
Beta (1Y)0.78
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees115
SectorTechnology
Sector Strength84
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.27
Shares Outstanding90,915,270
10 Day Avg. Volume8,778,822
30 Day Avg. Volume6,101,615
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)20.35
Price to Sales (P/S)0.00
P/FCF Ratio-19.98
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue9.87
Enterprise Value/Gross Profit-4.20K
Enterprise Value/Ebitda-5.51
Forecast
1Y Price Target
$13.00Price Target Upside47.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Red Cat Holdings Business Overview & Revenue Model
Company DescriptionRed 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 MoneyRed Cat Holdings generates revenue through the sale of its drone products and software solutions. The company's key revenue streams include direct sales of drones to consumer and commercial markets, licensing fees from its software platforms, and service contracts for drone management and analytics. Partnerships with businesses in sectors like agriculture and defense also contribute significantly to its earnings, as these collaborations often involve long-term contracts and recurring revenue opportunities. Additionally, Red Cat Holdings may engage in strategic acquisitions to enhance its product portfolio and market reach, further bolstering its revenue potential.
Red Cat Holdings Earnings Call Summary
Earnings Call Date:Mar 31, 2025
(Q3-2025)
| % Change Since: 49.66%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Positive
The earnings call highlighted several positive developments, such as the operational status of the Long Beach factory, advancements in drone technology, and promising international opportunities. However, there are some challenges, including CFO transition issues and uncertainty in additional funding. Overall, the sentiment leans towards a positive outlook given the company's strategic advancements and growth prospects.Q3-2025 Updates
Positive Updates
Long Beach Factory Operational
The Long Beach factory is now operational and shipped its first drones in March. The company expects to continue expanding and scaling the facility to clear backlogs.
Black Widow Vehicle Navigation Feature
The vehicle navigation feature for the Black Widow is almost complete, providing a unique competitive advantage and expected to expand margins.
Partnership with Palantir
Red Cat is partnering with Palantir to provide digital navigation software, which is not yet included in guidance but expected to significantly enhance drone capabilities.
Positive Outlook on LRIP
The company is optimistic about the Low-Rate Initial Production (LRIP) for their products, expecting it to be significantly higher than earlier reports.
International Opportunities
Red Cat is pursuing opportunities with NATO allies and in The Pacific, with ongoing tenders and potential contracts unaffected by geopolitical tensions.
Negative Updates
CFO Transition Challenges
Due to a recent CFO hiring, the SEC requirement for CFO signature on the 10-K report caused a delay in its filing, although this was managed by the VP of Finance.
Uncertainty in Additional SRR Funding
Red Cat has requested an additional $100 million in SRR funds for 2025, but there is uncertainty about the amount that will be granted, if any.
Company Guidance
During the Red Cat Holdings conference call on March 31, 2025, CEO Jeff Thompson provided several key updates and metrics. The Long Beach factory began shipping drones in March, with expectations to continue monthly shipments as the facility scales up. Notably, the Black Widow's vehicle navigation feature, which is near completion, is expected to enhance margins due to its competitive advantage. Thompson also mentioned the potential for significant increases in the Low Rate Initial Production (LRIP) contracts, exceeding previous reports. Furthermore, Red Cat is working with Palantir on digital navigation software, which is not yet included in their financial guidance. The company anticipates requesting an additional $100 million for 2025 SRR funds, highlighting the anticipated growth in drone warfare. Overall, Thompson expressed confidence in meeting the $25 to $65 million guidance, excluding potential additional funds or software sales, with more updates expected at the upcoming Investor Day Town Hall.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.35
Negative
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.50
Neutral
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.40
Negative
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 12.25M | 17.84M | 9.91M | 6.43M | 5.00M | 403.94K | Gross Profit |
| -153.63K | 3.68M | -336.80K | 925.51K | 1.07M | 78.56K | EBIT |
| -45.09M | -19.30M | -27.13M | -13.00M | -4.88M | -1.66M | EBITDA |
| -46.25M | -17.46M | -25.29M | -11.28M | -11.98M | -1.66M | Net Income Common Stockholders |
| -55.95M | -24.05M | -27.09M | -10.38M | -14.45M | -1.60M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 7.72M | 6.07M | 16.07M | 48.88M | 277.35K | 236.67K | Total Assets |
| 30.24M | 48.54M | 60.19M | 85.08M | 11.69M | 2.81M | Total Debt |
| 27.81M | 2.27M | 2.08M | 2.97M | 2.02M | 568.77K | Net Debt |
| 20.09M | -3.80M | -1.18M | -1.11M | 1.74M | 332.10K | Total Liabilities |
| 1.84M | 4.97M | 5.58M | 7.16M | 6.43M | 1.28M | Stockholders Equity |
| 28.91M | 43.56M | 54.61M | 77.92M | 5.27M | 1.53M |
| Cash Flow | Free Cash Flow | ||||
| -31.30M | -18.85M | -31.65M | -16.38M | -1.40M | -811.58K | Operating Cash Flow |
| -30.83M | -18.60M | -29.20M | -16.02M | -1.40M | -811.58K | Investing Cash Flow |
| 4.93M | 13.57M | 29.59M | -46.60M | -48.37K | 46.33K | Financing Cash Flow |
| 6.51M | 7.80M | -1.22M | 66.43M | 1.49M | 498.49K |
Red Cat Holdings Technical Analysis
Positive
8.80
Price Trends
6.17
Positive
6.84
Positive
6.24
Positive
Market Momentum
0.53
Negative
69.13
Neutral
77.35
Neutral
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 8.8 is above the 20-day moving average (MA) of 6.81, above the 50-day MA of 6.17, and above the 200-day MA of 6.24, indicating a bullish trend. The MACD of 0.53 indicates Negative momentum. The RSI at 69.13 is Neutral, neither overbought nor oversold. The STOCH value of 77.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCAT.
Red Cat Holdings Risk Analysis
Red Cat Holdings disclosed 46 risk factors in its most recent earnings report. Red Cat Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Red Cat Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $971.44M | ― | -15.20% | ― | -6.53% | -1059.95% | |
62 Neutral | $11.80B | 10.31 | -7.45% | 2.91% | 7.43% | -7.78% | |
56 Neutral | $878.23M | ― | -13.00% | ― | -9.29% | 17.86% | |
54 Neutral | $741.87M | ― | -100.48% | ― | ― | ― | |
49 Neutral | $98.34M | ― | -68.97% | ― | -9.27% | 19.30% | |
47 Neutral | $325.82M | ― | -10.27% | ― | ― | ― | |
43 Neutral | $235.99M | ― | -99.85% | ― | -8.09% | 22.06% |
* Technology Sector Average
Performance Comparison
RCAT
Red Cat Holdings
8.80
7.89
867.03%
DDD
3D Systems
1.84
-2.18
-54.23%
SSYS
Stratasys
10.66
1.56
17.14%
NNDM
Nano Dimension
1.49
-1.02
-40.64%
CRSR
Corsair Gaming
9.51
-1.63
-14.63%
MKFG
Markforged Holding
4.74
-0.06
-1.25%
Red Cat Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Red Cat Holdings Updates Director Compensation Plan
Neutral
May 22, 2025
On May 20, 2025, Red Cat Holdings‘ Board of Directors approved a new director compensation plan following a fiscal year transition. The plan increases annual cash and equity compensation for directors and adjusts stipends for various committee roles. Additionally, the Board approved a new compensation plan for CEO Jeffrey Thompson, replacing his base salary with stock options and awarding a discretionary bonus for a recent stock offering. These changes reflect strategic adjustments in executive and director compensation, potentially impacting stakeholder perceptions and company operations.
The most recent analyst rating on (RCAT) stock is a Buy with a $4.00 price target. To see the full list of analyst forecasts on Red Cat Holdings stock, see the RCAT Stock Forecast page.
Executive/Board Changes
Red Cat Holdings Appoints Interim CFO Jeffrey Thompson
Neutral
Mar 17, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.