Red Cat Holdings (RCAT) AI Stock Analysis

• Market Cap: $959.74M
• Dividend Yield: N/A
• Average Volume (3M): 7.56M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.29
• 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: 5,671,898
• 30 Day Avg. Volume: 7,556,751
• 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: 0.65
• Enterprise Value/Revenue: 38.72
• Enterprise Value/Gross Profit: 4.48K
• Enterprise Value/Ebitda: -13.27
• 1Y Price Target: $15.00
• Price Target Upside: 86.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: $8.00 ▼(-0.50% Downside)

Red Cat Holdings' overall stock score is influenced by its strong revenue growth and positive corporate events. However, significant profitability challenges and bearish technical indicators weigh on the score. The absence of valuation metrics adds uncertainty.

Positive Factors

Revenue Growth

The significant revenue growth in Q3, surpassing expectations, indicates strong demand for Red Cat's products, especially in defense sectors, supporting long-term business expansion.

Strategic Partnerships

The partnership with Apium Swarm Robotics enhances Red Cat's capabilities in defense and national security, positioning it as a key player in advanced drone solutions.

Leadership Transition

The leadership changes aim to optimize operations and financial strategies, potentially improving execution and supporting Red Cat's growth in the drone industry.

Negative Factors

Profitability Challenges

Persistent negative margins indicate ongoing profitability challenges, which may hinder Red Cat's ability to reinvest in growth and compete effectively long-term.

Negative Cash Flow

Negative cash flows suggest financial strain, limiting Red Cat's ability to fund operations and growth initiatives without external financing, impacting sustainability.

Financial Instability

A negative return on equity indicates that Red Cat is not effectively generating profits from its equity, raising concerns about its long-term financial health.

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 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: 8.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 8.04 is above the 20-day moving average (MA) of 7.46, below the 50-day MA of 9.89, and below the 200-day MA of 8.20, indicating a neutral trend. The MACD of -0.23 indicates Negative momentum. The RSI at 47.63 is Neutral, neither overbought nor oversold. The STOCH value of 78.37 is Neutral, 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	71 Outperform	$24.33B	30.03	8.11%	―	7.41%	-12.85%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	60 Neutral	$12.83B	618.57	1.20%	―	14.00%	23.78%
RCAT	53 Neutral	$959.74M	―	―	―	―	―
AVAV	52 Neutral	$11.93B	―	-2.64%	―	79.89%	-171.81%
NNDM	50 Neutral	$345.01M	-1.49	-10.03%	―	42.17%	-215.37%
UAVS	41 Neutral	$55.81M	-0.08	-110.92%	―	-6.34%	98.60%

Red Cat Holdings Corporate Events

Red Cat Holdings Announces Key Leadership Transitions

On December 2, 2025, Red Cat Holdings announced key leadership transitions with the promotion of Christian Ericson from Chief Financial Officer to Chief Operating Officer, and the appointment of Christian Morrison as the new Chief Financial Officer. These changes are aimed at strengthening operational execution and financial performance as the company accelerates growth in the drone industry. Ericson will focus on optimizing supply chain and production processes, while Morrison will drive financial discipline and strategic growth initiatives. Both leaders bring extensive experience to their new roles, supporting Red Cat’s mission to deliver cutting-edge technology and create value for shareholders.

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.