Red Cat Holdings (RCAT)
NASDAQ:RCAT
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Red Cat Holdings
(NASDAQ:RCAT)
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Rating:53Neutral
Price Target:
$14.50
▲(13.99% Upside)
Action:Reiterated
Date:05/29/26
The score is held back primarily by weak financial performance—thin/unstable profitability and heavy cash burn despite rapid revenue growth. Technicals are moderately supportive with the stock trading above key moving averages, while corporate events provide a meaningful boost via strengthened funding, a defense order, and capability-expanding acquisitions. Valuation is constrained by ongoing losses (negative P/E).
Positive Factors
Strengthened liquidity from $225M equity raise
The upsized public offering materially boosts available capital, extending runway and funding multi‑quarter investments in R&D, production scale and acquisitions. Durable funding improves strategic optionality and reduces near‑term solvency risk while the company pursues defense contracts.
Negative Factors
Large and worsening cash burn
Sustained negative operating and free cash flows indicate the business consumes real cash to fund growth and operations. Absent durable profit conversion, the company remains dependent on external financing, raising dilution and execution risk if revenue growth falters or capital markets tighten.
Read all positive and negative factors
Positive Factors
Negative Factors
Strengthened liquidity from $225M equity raise
The upsized public offering materially boosts available capital, extending runway and funding multi‑quarter investments in R&D, production scale and acquisitions. Durable funding improves strategic optionality and reduces near‑term solvency risk while the company pursues defense contracts.
Read all positive factors
Red Cat Holdings (RCAT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.74B
Dividend YieldN/A
Average Volume (3M)10.96M
Price to Earnings (P/E)―
Beta (1Y)1.46
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees115
SectorIndustrials
Sector Strength72
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.74
Shares Outstanding122,742,360
10 Day Avg. Volume13,224,881
30 Day Avg. Volume10,963,683
Financial Highlights & Ratios
PEG Ratio0.45
Price to Book (P/B)3.85
Price to Sales (P/S)23.26
P/FCF Ratio-9.89
Enterprise Value/Market Cap0.81
Enterprise Value/Revenue34.57
Enterprise Value/Gross Profit1.10K
Enterprise Value/Ebitda-21.89
Forecast
1Y Price Target
$20.80Price Target Upside63.52% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)-0.59
Revenue Forecast (FY)$153.17M
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 primarily makes money by selling drone hardware and associated solutions to customers, with a strong emphasis on government and defense procurement. Key revenue streams include: (1) UAS product revenue from sales of small unmanned aircraft...
Red Cat Holdings Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Aug 13, 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 | Dec 2025 | Dec 2025 | Jul 2024 | Apr 2023 | Apr 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 40.73M | 7.28M | 17.84M | 4.62M | 6.43M |
| Gross Profit | 1.27M | -2.03M | 3.68M | -834.31K | 925.51K |
| EBITDA | -64.33M | -36.50M | -16.04M | -22.54M | -11.28M |
| Net Income | -72.08M | -65.42M | -24.05M | -28.11M | -11.69M |
Balance Sheet | |||||
| Total Assets | 273.68M | 55.60M | 48.54M | 60.74M | 85.08M |
| Cash, Cash Equivalents and Short-Term Investments | 167.87M | 9.15M | 6.07M | 15.99M | 48.88M |
| Total Debt | 18.43M | 1.97M | 2.27M | 2.97M | 3.72M |
| Total Liabilities | 27.84M | 5.49M | 4.97M | 5.98M | 7.16M |
| Stockholders Equity | 245.83M | 50.12M | 43.56M | 54.77M | 77.92M |
Cash Flow | |||||
| Free Cash Flow | -95.78M | -20.70M | -18.82M | -32.23M | -16.38M |
| Operating Cash Flow | -89.13M | -20.54M | -18.56M | -29.78M | -16.02M |
| Investing Cash Flow | -6.65M | 4.24M | 13.57M | 29.59M | -46.60M |
| Financing Cash Flow | 254.49M | 19.39M | 7.80M | -633.55K | 66.43M |
Red Cat Holdings Technical Analysis
Positive
12.72
Price Trends
11.94
Positive
12.83
Positive
11.23
Positive
Market Momentum
0.04
Negative
68.74
Neutral
90.60
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 12.72 is above the 20-day moving average (MA) of 10.44, above the 50-day MA of 11.94, and above the 200-day MA of 11.23, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 68.74 is Neutral, neither overbought nor oversold. The STOCH value of 90.60 is Negative, 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 52 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 |
|---|---|---|---|---|---|---|---|
78 Outperform | $29.38B | 31.09 | 8.85% | ― | 7.74% | 12.76% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $12.22B | 385.65 | 1.26% | ― | 21.82% | 34.38% | |
53 Neutral | $1.74B | -20.53 | -34.71% | ― | ― | ― | |
51 Neutral | $69.73M | -3.11 | -66.25% | ― | -19.66% | 97.84% | |
50 Neutral | $10.71B | -45.04 | -6.41% | ― | 116.86% | -467.25% | |
48 Neutral | $353.58M | -1.08 | -58.69% | ― | 101.52% | -310.43% |
* Industrials Sector Average
RCAT
Red Cat Holdings
14.50
8.55
143.70%
AVAV
AeroVironment
207.24
29.21
16.41%
KTOS
Kratos Defense
64.13
27.24
73.84%
TDY
Teledyne Technologies
619.83
120.97
24.25%
NNDM
Nano Dimension
1.75
0.20
12.90%
UAVS
AgEagle Aerial Systems
1.17
0.38
48.10%
Red Cat Holdings Corporate Events
Business Operations and StrategyM&A Transactions
Red Cat Completes Quaze Wireless Power Acquisition for Drones
Positive
May 20, 2026
On May 19, 2026, Red Cat Holdings completed the acquisition of all outstanding shares of Québec-based Quaze Technologies, adding wireless power capabilities to its portfolio of all-domain defense drones and robotics. The transaction was funde...
Business Operations and StrategyPrivate Placements and FinancingRegulatory Filings and Compliance
Red Cat Holdings Completes Upsized Public Equity Offering
Positive
May 18, 2026
On May 12, 2026, Red Cat Holdings, Inc. entered into an underwriting agreement with Evercore Group L.L.C. and BofA Securities, Inc. for a public offering of 23,936,171 shares of common stock at $9.40 per share, with a 30-day option for underwriter...
Business Operations and StrategyPrivate Placements and Financing
Red Cat Holdings Completes $225M Public Stock Offering
Positive
May 14, 2026
On May 12, 2026, Red Cat Holdings entered into an underwriting agreement with Evercore Group and BofA Securities for a public offering of 23,936,171 shares of common stock at $9.40 per share, with a 30-day option for underwriters to buy up to 3,59...
Business Operations and Strategy
Red Cat Wins $9.5M U.S. Army Drone Order
Positive
May 11, 2026
On May 8, 2026, Teal Drones, Inc., a wholly owned subsidiary of Red Cat Holdings, Inc., received a $9.5 million purchase order from the U.S. Army under its Short Range Reconnaissance Program of Record, with delivery of the additional drone units e...
Business Operations and StrategyM&A Transactions
Red Cat Closes Acquisition of Apium Swarm Robotics
Positive
Mar 31, 2026
On March 30, 2026, Red Cat Holdings announced it had closed the acquisition of Apium Swarm Robotics and related Apium businesses, a California-based developer of distributed control systems for autonomous swarming drones and uncrewed surface vesse...
Business Operations and StrategyM&A Transactions
Red Cat to Acquire Quaze Technologies in Stock Deal
Positive
Mar 31, 2026
On March 30, 2026, Red Cat Holdings, Inc. entered into a Share Purchase Agreement to acquire all of the issued and outstanding shares of Quebec-based Quaze Technologies Inc. through its wholly owned subsidiary, agreeing to pay approximately $25 mi...
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.