Red Cat (NASDAQ:RCAT) Trading 10% Higher on Analyst Upgrade

Red Cat Holdings, Inc. (NASDAQ:RCAT)’s share price was up 10% during mid-day trading on Tuesday after Needham & Company LLC raised their price target on the stock from $12.00 to $16.00. Needham & Company LLC currently has a buy rating on the stock. Red Cat traded as high as $13.28 and last traded at $13.1390. Approximately 16,381,553 shares changed hands during mid-day trading, an increase of 12% from the average daily volume of 14,652,831 shares. The stock had previously closed at $11.94.

Other research analysts also recently issued research reports about the stock. Wall Street Zen downgraded shares of Red Cat from a “hold” rating to a “sell” rating in a research note on Saturday, October 4th. Weiss Ratings restated a “sell (d-)” rating on shares of Red Cat in a report on Wednesday, October 8th. Finally, LADENBURG THALM/SH SH raised Red Cat to a “strong-buy” rating in a research report on Thursday, December 18th. Two analysts have rated the stock with a Strong Buy rating, two have given a Buy rating and one has assigned a Sell rating to the company’s stock. According to MarketBeat, Red Cat currently has a consensus rating of “Buy” and a consensus target price of $16.00.

Red Cat News Roundup

Here are the key news stories impacting Red Cat this week:

• Positive Sentiment: Preliminary Q4 / FY2025 revenue explosion tied to mass production under a U.S. Army SRR contract — company expects Q4 revenue of $24.0–$26.5M (~1,842% YoY) as deliveries ramp in LRIP, signaling a move from prototype to production. Red Cat Holdings Announces Preliminary Revenue Results for the Fourth Quarter and Full Year 2025 Red Cat stock soars after preliminary revenue surge of over 1,800%
• Positive Sentiment: Operational expansion and contract tailwinds: production contract value expanded (reported ~ $35M), NATO catalogue listing for Black Widow, new maritime division (Blue Ops) and a large new US facility — all support multi-year revenue potential and diversification. Red Cat Revenue Surges 1,800% After Crossing Into Mass Production (MarketBeat)
• Positive Sentiment: Analyst and market response: Needham raised its price target to $16 and kept a Buy rating, reflecting updated models for growing defense revenue and production ramp. Benzinga / Tickerreport coverage of analyst price target raise
• Positive Sentiment: Macro defense spending tailwind: reports about a proposed larger U.S. defense budget are supporting investor appetite for drone/defense names, benefiting RCAT sentiment. Trump’s $1.5 Trillion Military Budget Is Sending This Drone Stock Soaring: Momentum Score Spikes
• Neutral Sentiment: Valuation and analyst notes: independent valuation pieces highlight strong momentum but also point to ongoing losses and model revisions — useful for assessing whether current pricing already embeds the production story. Assessing Red Cat Holdings (RCAT) Valuation After Recent Share Price Momentum And Ongoing Losses
• Neutral Sentiment: Company guidance entries reported updated FY/Q4 guidance (details incomplete in some summaries) — guidance clarity from the company’s upcoming report and audited results will be important. Red Cat stock in spotlight after massive revenue growth outlook
• Negative Sentiment: Profitability and sustainability risks: despite revenue growth, Red Cat reported a significant net loss (e.g., ~$52.4M through 9M/2025 in some coverage); the company remains unprofitable and must convert revenue into margins. Red Cat Revenue Surges 1,800% After Crossing Into Mass Production (MarketBeat)
• Negative Sentiment: High short interest and volatility risk: roughly ~20% of float sold short — this amplifies upside on positive news (short squeeze) but also raises downside volatility if execution or guidance disappoints. Red Cat stock soars after preliminary revenue surge of over 1,800%

Institutional Investors Weigh In On Red Cat

A number of hedge funds have recently added to or reduced their stakes in the stock. Bank of America Corp DE grew its holdings in shares of Red Cat by 407.0% in the fourth quarter. Bank of America Corp DE now owns 3,397 shares of the company’s stock worth $44,000 after acquiring an additional 2,727 shares during the period. Royal Bank of Canada boosted its position in Red Cat by 76.4% in the first quarter. Royal Bank of Canada now owns 57,800 shares of the company’s stock worth $340,000 after purchasing an additional 25,031 shares during the last quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its stake in shares of Red Cat by 63.6% during the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 229,259 shares of the company’s stock valued at $1,348,000 after purchasing an additional 89,095 shares during the period. Goldman Sachs Group Inc. increased its position in shares of Red Cat by 28.7% during the 1st quarter. Goldman Sachs Group Inc. now owns 266,099 shares of the company’s stock valued at $1,565,000 after purchasing an additional 59,334 shares during the last quarter. Finally, Post Resch Tallon Group Inc. bought a new position in shares of Red Cat in the 2nd quarter worth approximately $154,000. 37.97% of the stock is currently owned by hedge funds and other institutional investors.

Red Cat Stock Up 4.6%

The business’s fifty day moving average is $8.51 and its 200-day moving average is $9.52. The company has a market cap of $1.63 billion, a PE ratio of -31.05 and a beta of 1.48.

Red Cat (NASDAQ:RCAT) last released its quarterly earnings results on Thursday, November 13th. The company reported ($0.16) earnings per share for the quarter, missing the consensus estimate of ($0.07) by ($0.09). The business had revenue of $9.65 million for the quarter, compared to analyst estimates of $8.18 million. Analysts forecast that Red Cat Holdings, Inc. will post -0.5 EPS for the current fiscal year.

About Red Cat

Red Cat Holdings, Inc (NASDAQ: RCAT) is a technology holding company that develops and delivers advanced robotics, autonomy, and sensing solutions for defense, national security, public safety and commercial customers. Headquartered in American Fork, Utah, the company brings together a portfolio of specialized operating businesses focused on unmanned aerial systems (UAS), mission management software, precision mapping sensors and engineering services.

Through its UAS segment, Red Cat designs and manufactures small to medium-sized fixed-wing and vertical-takeoff drones that support intelligence, surveillance and reconnaissance (ISR) missions.