RCAT Stock Forecast & Price Target

Red Cat Holdings is expected to experience significant revenue growth driven by the expansion of its SRR2 program, with projections estimating revenues to reach $60 million in 2025 and $125 million by 2026. Furthermore, the company anticipates a robust 40% revenue increase in 2027, potentially reaching $175 million, as opportunities in unmanned surface vehicles and international markets begin to materialize. Additionally, a substantial increase in cash reserves, from approximately $66 million in the previous quarter to over $206 million, positions the company favorably for future investments and growth initiatives in the unmanned aerial systems sector.

Red Cat Holdings Inc has revised its 2025 revenue guidance down to $34.5 - $37.5 million, approximately 44% below consensus forecasts, primarily due to delays from a government shutdown and challenges with new product launches, particularly the Edge 130 drone. Additionally, the company's GAAP gross margins have sharply declined to 6.6% from 11.7% quarter-over-quarter, reflecting increased operating expenses that have prompted a downward adjustment of the 2025 adjusted EBITDA estimate to a loss of $48.3 million. The combination of these factors, along with execution risks in expanding into new unmanned domains, presents significant headwinds for the company, potentially leading to lower growth prospects and higher cash burn, which could adversely impact the stock's valuation.