Red Cat Holdings (RCAT) Reports 1,842% Q4 Sales Surge to $26.5 Million

Written by Emily J. Thompson, Senior Investment Analyst

RCAT+10.61%

AVAV-9.25%

Source: Fool

Updated: 1h ago

0mins

Source: Fool

Sales Surge: Red Cat Holdings preannounced Q4 2025 sales between $24 million and $26.5 million, reflecting an astounding 1,842% year-over-year increase, indicating robust demand and rapid production scaling in the military drone sector.
Stock Price Momentum: Following Northland Capital's price target increase to $22 per share and reiteration of an outperform rating, Red Cat's stock surged 6.44% last week and gained an additional 3.7% today, showcasing strong market optimism about its future performance.
Policy Tailwind: The FCC's ban on foreign-made drones and parts is likely to benefit Red Cat, particularly as popular Chinese models are affected, potentially solidifying its market position amid increasing domestic demand.
Competitive Landscape: Despite impressive sales growth, Red Cat's annual revenue of approximately $100 million pales in comparison to AeroVironment's $1.4 billion, highlighting ongoing challenges in profitability and market share within the competitive drone industry.

RCAT

$14.975+Infinity%1D

Analyst Views on RCAT

Wall Street analysts forecast RCAT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for RCAT is 15.00 USD with a low forecast of 12.00 USD and a high forecast of 18.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

3 Analyst Rating

3 Buy

0 Hold

0 Sell

Strong Buy

Current: 13.670

Low

12.00

Averages

15.00

High

18.00

Current: 13.670

Low

12.00

Averages

15.00

High

18.00

Needham

Buy

downgrade

$17 -> $12

Al Analysis

2025-11-14

Reason

Needham

Price Target

$17 -> $12

Al Analysis

2025-11-14

downgrade

Buy

Reason

Needham lowered the firm's price target on Red Cat to $12 from $17 and keeps a Buy rating on the shares. The company reported strong Q3 results, with record revenues that exceeded Street expectations, but due to the government shutdown and a new product delay, Red Cat lowered 2025 revenue guidance 44% below Street expectations, the analyst tells investors in a research note. The firm adds however that while the SRR2 FRP contract is likely pushed out to Q1, the size of the opportunity is unchanged.

Northland

Michael Latimore

Outperform

maintain

$15 -> $16

2025-08-15

Reason

Northland

Michael Latimore

Price Target

$15 -> $16

2025-08-15

maintain

Outperform

Reason

Northland analyst Michael Latimore raised the firm's price target on Red Cat to $16 from $15 and keeps an Outperform rating on the shares after the company announced they signed the TD3 LRP contract with the U.S. Army to deliver up to 690 SRR Black Widow systems for federal FY25. The firm, which estimates the value to be $40M+, sees visibility into FY26 as "high now."

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FuzzyPanda Research

FuzzyPanda

downgrade

2025-08-15

Reason

FuzzyPanda Research

FuzzyPanda

Price Target

2025-08-15

downgrade

Reason

FuzzyPanda Research is short Red Cat as it believes "that the best time to short a paid stock promotion is when it finally has to deliver results." In a recently published report, FuzzyPanda says that "CEO Jeff Thompson prematurely announced Red Cat had won the Army's SRR Tranche 2 program in November... And when Thompson finally announced on Thursday that Red Cat had signed its Low-Rate Initial Production starter contract, it turned out to be for 690 drone systems - 46% smaller than what Jeff promised to investors back in February 2025... Jeff also keeps telling investors the Army revenue is guaranteed and that the entire Army SRR T2 budget will go to Red Cat. But Jeff is obscuring that the Army is not monogamous. The Army SRR T2 program is actually NOT sole sourced." Reference Link

Northland

Outperform

maintain

$13 -> $15

2025-08-05

Reason

Northland

Price Target

$13 -> $15

2025-08-05

maintain

Outperform

Reason

Northland raised the firm's price target on Red Cat to $15 from $13 and keeps an Outperform rating on the shares. The firm is "much more comfortable" with its expectations for rapid growth for Red Cat given recent government actions and filings, the analyst tells investors.

About RCAT

Red Cat Holdings Inc is a Puerto Rico-based provider of products, services, and solutions to the drone industry. The Company provides its services to the enterprise, military, and consumer markets via designing, developing, marketing, and drone software and products' sales. Red Cat's Golden Eagle drones are approved by the Department of Defense for reconnaissance, public safety, and inspection applications. Through its wholly owned subsidiaries, Teal Drones and FlightWave Aerospace, The Company develops American-made hardware and software that support military, government, and public safety operations across air, land, and sea. Its Family of Systems, led by Black Widow, delivers tactical capabilities in small, unmanned aircraft systems (sUAS). The Company's offering also includes uncrewed surface vessels (USVs), delivering integrated platforms designed to enhance safety and multi-domain mission effectiveness.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.