Red Cat Holdings (RCAT)
NASDAQ:RCAT
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Red Cat Holdings
(NASDAQ:RCAT)
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Rating:52Neutral
Price Target:
$16.00
▲(0.82% Upside)
Action:ReiteratedDate:03/20/26
The score is held back primarily by severe losses and heavy cash burn (weak income statement and cash flow), even though leverage is modest. Technicals are the main offset, with a clear uptrend and supportive momentum indicators. Valuation remains challenged due to negative earnings and no dividend support.
Positive Factors
Low Leverage / Financial Flexibility
Debt-to-equity near 0.05 provides durable financial flexibility: low interest burden and room to raise capital or access credit without immediate solvency pressure. This structural buffer supports multi‑period investment in products, contract fulfillment, and scaling while the business improves profitability.
Negative Factors
Severe Cash Burn
Substantial negative operating and free cash flow are structural risks to runway and strategy execution. Continued cash burn will force external financing or material cost cuts; financing typically dilutes shareholders or raises leverage, constraining the firm's ability to invest in product development and scale sustainably.
Read all positive and negative factors
Positive Factors
Negative Factors
Low Leverage / Financial Flexibility
Debt-to-equity near 0.05 provides durable financial flexibility: low interest burden and room to raise capital or access credit without immediate solvency pressure. This structural buffer supports multi‑period investment in products, contract fulfillment, and scaling while the business improves profitability.
Read all positive factors
Red Cat Holdings (RCAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.70B
Dividend YieldN/A
Average Volume (3M)18.06M
Price to Earnings (P/E)―
Beta (1Y)1.37
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees115
SectorIndustrials
Sector Strength72
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.17
Shares Outstanding121,138,760
10 Day Avg. Volume20,663,455
30 Day Avg. Volume18,058,231
Financial Highlights & Ratios
PEG Ratio-0.05
Price to Book (P/B)7.66
Price to Sales (P/S)52.80
P/FCF Ratio-18.56
Enterprise Value/Market Cap0.73
Enterprise Value/Revenue30.31
Enterprise Value/Gross Profit968.18
Enterprise Value/Ebitda-19.19
Forecast
1Y Price Target
$20.67Price Target Upside30.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)-0.38
Revenue Forecast (FY)$148.82M
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 ap...
How the Company Makes Money
Red Cat generates revenue primarily by selling drone hardware and related services/software. Key revenue streams include: (1) UAS product sales: sales of small drones (including the Black Widow family) and associated components/accessories to cust...
Red Cat Holdings Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Sep 22, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant operational advancements such as the launch of the Long Beach factory and strategic partnerships like Palantir, suggesting positive growth prospects. However, there are uncertainties around financials due to CFO transition and additional funding, creating a mixed outlook.Positive Updates
Long Beach Facility Launch
The Long Beach factory is operational and shipped its first drones in March, with expectations for monthly shipments as the facility scales and backlog is resolved.
Negative Updates
Delayed CFO Involvement
Chris Erickson, the newly hired CFO, was not involved in the 10-K signing due to the timing of his employment, necessitating a brief earnings call.
Read all updates
Q3-2025 Updates
Positive
Negative
Long Beach Facility Launch
The Long Beach factory is operational and shipped its first drones in March, with expectations for monthly shipments as the facility scales and backlog is resolved.
Read all positive updates
Company Guidance
During the conference call on March 31, 2025, Red Cat Holdings provided several key updates and forward-looking statements. Jeff Thompson, the CEO, announced that the company's Long Beach facility is operational and shipped its first drones in March, with plans to increase production monthly. The Black Widow drone has nearly completed its vehicle navigation feature, which is expected to enhance margins. The company has also signed a features contract for the Black Widow under the SIR program and anticipates signing the LRIP contract soon. International opportunities remain strong, particularly in collaboration with NATO allies. Additionally, Red Cat is integrating Palantir's operating system to improve efficiency and margins and expects significant financial impact from the digital navigation software, although this is not yet included in current financial guidance. The company has requested an additional $100 million for 2025 to support expanding drone capabilities, reflecting the growing importance of drones in modern warfare. A more detailed update is anticipated at an upcoming Investor Day Town Hall.Red Cat Holdings Financial Statement Overview
Summary
Income Statement
18
Very Negative
Balance Sheet
62
Positive
Cash Flow
14
Very Negative
| Breakdown | TTM | Jun 2025 | Jul 2024 | Apr 2023 | Apr 2022 | Jul 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 40.73M | 7.28M | 17.84M | 4.62M | 6.43M | 5.00M |
| Gross Profit | 1.28M | -2.03M | 3.68M | -834.31K | 925.51K | 1.07M |
| EBITDA | -64.33M | -36.50M | -16.04M | -22.54M | -11.28M | -11.98M |
| Net Income | -72.07M | -65.42M | -24.05M | -28.11M | -11.69M | -13.24M |
Balance Sheet | ||||||
| Total Assets | 277.61M | 55.60M | 48.54M | 60.74M | 85.08M | 11.69M |
| Cash, Cash Equivalents and Short-Term Investments | 167.87M | 9.15M | 6.07M | 15.99M | 48.88M | 277.35K |
| Total Debt | 18.43M | 3.27M | 2.27M | 2.97M | 3.72M | 2.02M |
| Total Liabilities | 31.77M | 5.48M | 4.97M | 5.98M | 7.16M | 6.43M |
| Stockholders Equity | 245.83M | 50.12M | 43.56M | 54.77M | 77.92M | 5.27M |
Cash Flow | ||||||
| Free Cash Flow | -95.78M | -20.70M | -18.82M | -32.23M | -16.38M | -1.40M |
| Operating Cash Flow | -89.13M | -20.54M | -18.56M | -29.78M | -16.02M | -1.40M |
| Investing Cash Flow | -6.65M | 4.24M | 13.57M | 29.59M | -46.60M | -48.37K |
| Financing Cash Flow | 254.49M | 19.39M | 7.80M | -633.55K | 66.43M | 1.49M |
Red Cat Holdings Technical Analysis
Neutral
15.87
Price Trends
14.12
Negative
11.34
Positive
10.57
Positive
Market Momentum
0.50
Positive
47.51
Neutral
42.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RCAT, the sentiment is Neutral. The current price of 15.87 is above the 20-day moving average (MA) of 15.06, above the 50-day MA of 14.12, and above the 200-day MA of 10.57, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 47.51 is Neutral, neither overbought nor oversold. The STOCH value of 42.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $28.30B | 27.35 | 8.65% | ― | 7.41% | -12.85% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
53 Neutral | $9.78B | -21.68 | -6.41% | ― | 79.89% | -171.81% | |
52 Neutral | $1.70B | -12.05 | -46.23% | ― | ― | ― | |
52 Neutral | $14.17B | 606.55 | 1.20% | ― | 14.00% | 23.78% | |
48 Neutral | $388.31M | -1.62 | -36.12% | ― | 42.17% | -215.37% | |
45 Neutral | $41.15M | -5.65 | -180.40% | ― | -6.34% | 98.60% |
* Industrials Sector Average
RCAT
Red Cat Holdings
14.00
8.00
133.33%
AVAV
AeroVironment
195.91
72.32
58.52%
KTOS
Kratos Defense
75.86
44.39
141.05%
TDY
Teledyne Technologies
611.08
104.17
20.55%
NNDM
Nano Dimension
1.79
0.08
4.68%
UAVS
AgEagle Aerial Systems
0.94
-0.42
-30.59%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.