RCAT Stock Forecast & Price Target

Red Cat Holdings Inc. is projected to experience significant revenue growth, with expectations of reaching $60 million in 2025 and $125 million in 2026, driven by the SRR2 LRP contract, increased sales of the Edge 130 drones, and successful international expansion. Additionally, the company is anticipated to achieve a further 40% revenue increase to $175 million in 2027 as it capitalizes on opportunities in next-generation unmanned domains and expands its operations in the military sector. The company also reported a significant improvement in its financial position, ending the third quarter of 2025 with a cash balance of $206.4 million, reflecting a notable increase from the previous quarter and underscoring its solid financial foundation to support future growth initiatives.

Red Cat Holdings Inc. has revised its 2025 revenue guidance to a range of $34.5 to $37.5 million, which is approximately 44% below consensus expectations, primarily due to factors such as the government shutdown and delays in product launches. The company's GAAP gross margins have declined to 6.6%, down from 11.7% in the previous quarter, indicating increased cost pressures. Additionally, an increase in operating expenditures has led to a worsened adjusted EBITDA estimate for 2025, now projected to be a loss of $48.3 million, raising concerns about growth potential and cash burn that could result in significant multiple compression.