Red Cat Holdings Inc. (NASDAQ:RCAT) shares are under pressure after reporting strong revenue growth but a wider-than-expected loss.

The company’s shares fell on Thursday following the release of its fourth-quarter 2025 results, despite strong revenue growth.

Q4 Results

Red Cat reported quarterly revenue of $26.24 million, exceeding the $23.92 million analyst estimate and up 1,985% from $1.26 million a year earlier. However, it posted a loss of 17 cents per share, wider than the expected 15-cent loss.

For the full year, revenue grew 161% to $40.7 million, up from $15.6 million in 2024. Cash surged to $167.9 million at year-end, compared to $9.2 million a year earlier, while inventory and prepaid inventory rose to $30.4 million from $13.6 million

Key operational highlights included new Black Widow drone orders, a 100-unit order through the NSPA, expanded partnerships with AeroVironment and Redwire, the launch of the FANG FPV platform, and increased manufacturing capacity to 254,000 square feet.

CEO Jeff Thompson said the company is “not just responding to market opportunities,” but rather “defining the future of American-made tactical drone systems.”

Technical Analysis

The stock is currently trading 1.6% below its 20-day simple moving average (SMA) and 3.6% above its 50-day SMA, indicating some short-term weakness but longer-term strength.

Over the past 12 months, shares have surged by 163.15%, and they are currently positioned closer to their 52-week highs than lows, reflecting a strong upward trend.

The RSI is at 64.87, which is considered neutral territory, suggesting that the stock is neither overbought nor oversold. Meanwhile, the MACD is at 1.0160, above its signal line at 0.7600, indicating bullish momentum.

Sector Performance

Red Cat is currently underperforming in the Technology sector, which ranks 7th out of 11 sectors and has declined 0.25% today. This underperformance is notable given that the sector has seen a slight downturn over the past 30 days, losing 1.32%.

The stock’s 16.65% decline today highlights its struggles amid broader sector weakness. With the Technology sector facing challenges, Red Cat’s performance may reflect specific concerns about its business model or market positioning.

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the May 13, 2026 (estimated) earnings report.

  • EPS Estimate: Loss of 14 cents (Up from Loss of 17 cents)
  • Revenue Estimate: $22.67 million (Up from $2.78 million)

Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $17.67. Recent analyst moves include:

  • Needham: Buy (Raises Target to $20.00) (Mar. 19)
  • Ladenburg Thalmann: Buy (Raises Target to $20.00) (Mar. 3)
  • Needham: Buy (Maintains Target to $16.00) (Mar. 2)

Top ETF Exposure

  • State Street SPDR S&P Kensho Future Security ETF (NYSE:FITE): 2.16% Weight
  • SPDR S&P Kensho Future Security ETF (NYSE:FITE): 1.56% Weight
  • REX Drone ETF (NASDAQ:DRNZ): 4.31% Weight

Significance: Because RCAT carries significant weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.

RCAT Stock Price Activity: Red Cat Holdings shares were down 16.38% at $14.21 at the time of publication on Thursday, according to Benzinga Pro data.

Following the results, Needham analyst Austin Bohlig maintained a Buy rating on RCAT and raised his price target to $20 from $16.

The cover image was generated using artificial intelligence via Nano Banana 2.