Red Cat Holdings (RCAT) AI Stock Analysis

• Market Cap: $1.25B
• Dividend Yield: N/A
• Average Volume (3M): 15.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• 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: 118,010,240
• 10 Day Avg. Volume: 10,854,894
• 30 Day Avg. Volume: 15,097,490
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.50
• Enterprise Value/Revenue: 67.76
• Enterprise Value/Gross Profit: -631.85
• Enterprise Value/Ebitda: -12.13
• 1Y Price Target: $16.50
• Price Target Upside: 46.67% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 47 Neutral
• Price Target: $11.00 ▼(-2.22% Downside)

The overall stock score is primarily impacted by the company's poor financial performance, characterized by declining revenues and negative profitability. Technical analysis provides some support with mixed signals, while the lack of valuation data adds uncertainty. The absence of earnings call and corporate events data limits the analysis to these factors.

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, 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 is facing significant financial challenges with declining revenues, negative profitability, and cash flow issues. The company needs to address its operational inefficiencies and improve its revenue generation to stabilize its financial position. While the debt-to-equity ratio is moderate, the negative return on equity and margins highlight the need for strategic improvements to enhance shareholder value.

Income Statement

Red Cat Holdings has shown a declining revenue trend with a significant negative revenue growth rate of -25.23% in the TTM period. The company is experiencing negative margins across the board, including a gross profit margin of -1.25% and a net profit margin of -456.69%, indicating substantial losses. The EBIT and EBITDA margins are also deeply negative, reflecting operational inefficiencies and high costs relative to revenue.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio of 0.96, suggesting a balanced approach to leveraging. However, the return on equity is significantly negative at -169.59%, indicating that the company is not generating returns for shareholders. The equity ratio is relatively stable, but the overall financial health is compromised by the negative profitability metrics.

Cash Flow

Cash flow analysis reveals a challenging situation with negative operating cash flow and free cash flow. The free cash flow growth rate is positive at 34.16%, but this is overshadowed by the negative operating cash flow to net income ratio of -1.07, indicating cash flow issues. The free cash flow to net income ratio is slightly positive at 1.02, suggesting some alignment between cash flow and reported earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.16M	7.28M	17.84M	9.91M	6.43M	5.00M
Gross Profit	-982.22K	-2.03M	3.68M	-336.80K	925.51K	1.07M
EBITDA	-51.15M	-36.50M	-17.46M	-25.29M	-11.28M	-11.98M
Net Income	-62.15M	-65.42M	-24.05M	-27.09M	-10.38M	-14.45M
Balance Sheet
Total Assets	121.37M	55.60M	48.54M	60.19M	85.08M	11.69M
Cash, Cash Equivalents and Short-Term Investments	65.93M	9.15M	6.07M	16.07M	48.88M	277.35K
Total Debt	21.92M	1.97M	2.27M	2.08M	2.97M	2.02M
Total Liabilities	25.80M	5.48M	4.97M	5.58M	7.16M	6.43M
Stockholders Equity	95.57M	50.12M	43.56M	54.61M	77.92M	5.27M
Cash Flow
Free Cash Flow	-42.00M	-31.05M	-18.85M	-31.65M	-16.38M	-1.40M
Operating Cash Flow	-41.29M	-30.80M	-18.60M	-29.20M	-16.02M	-1.40M
Investing Cash Flow	3.70M	4.24M	13.57M	29.59M	-46.60M	-48.37K
Financing Cash Flow	92.92M	19.39M	7.80M	-1.22M	66.43M	1.49M

Red Cat Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 11.25 is below the 20-day moving average (MA) of 12.55, above the 50-day MA of 11.04, and above the 200-day MA of 8.33, indicating a neutral trend. The MACD of -0.17 indicates Positive momentum. The RSI at 48.07 is Neutral, neither overbought nor oversold. The STOCH value of 52.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for RCAT.

Red Cat Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CAN	―	$581.56M	―	-75.92%	―	82.61%	42.42%
CRSR	―	$864.20M	―	-13.50%	―	2.08%	-113.97%
DDD	―	$366.80M	―	-46.51%	―	-9.11%	58.95%
NNDM	―	$377.77M	-1.67	-6.85%	―	27.39%	-64.74%
RCAT	―	$1.25B	―	―	―	―	―
UAVS	―	$65.00M	-0.10	-164.37%	―	1.90%	93.50%

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.