Northland Securities Forecasts Reduced Earnings for Red Cat

Key Points

• Northland Securities lowered its Q2 2026 EPS estimate for Red Cat to a loss of $0.21 from $0.19 previously, while forecasting a $0.73 per-share loss for fiscal 2026 and a $0.49 loss for fiscal 2027.
• Red Cat’s latest quarterly results fell short of expectations, with a $0.22-per-share loss versus the $0.12 consensus estimate and revenue of $15.47 million versus $17.63 million expected, despite revenue growth of 849.1% year over year.
• The stock opened at $7.63, well below its 50-day and 200-day moving averages; analysts maintain an overall “Buy” rating with an average price target of $21.40, but insider selling and recent governance concerns may weigh on sentiment.

Red Cat Holdings, Inc. (NASDAQ:RCAT - Free Report) - Equities research analysts at Northland Securities lowered their Q2 2026 earnings estimates for shares of Red Cat in a report issued on Thursday, July 23rd. Northland Securities analyst M. Latimore now anticipates that the company will earn ($0.21) per share for the quarter, down from their previous estimate of ($0.19). The consensus estimate for Red Cat's current full-year earnings is ($0.68) per share. Northland Securities also issued estimates for Red Cat's Q3 2026 earnings at ($0.15) EPS, Q4 2026 earnings at ($0.15) EPS, FY2026 earnings at ($0.73) EPS, Q1 2027 earnings at ($0.18) EPS, Q2 2027 earnings at ($0.17) EPS, Q3 2027 earnings at ($0.10) EPS, Q4 2027 earnings at ($0.04) EPS and FY2027 earnings at ($0.49) EPS.

Red Cat (NASDAQ:RCAT - Get Free Report) last posted its quarterly earnings results on Thursday, May 7th. The company reported ($0.22) EPS for the quarter, missing analysts' consensus estimates of ($0.12) by ($0.10). Red Cat had a negative net margin of 138.36% and a negative return on equity of 35.86%. The business had revenue of $15.47 million for the quarter, compared to the consensus estimate of $17.63 million. Red Cat's revenue was up 849.1% compared to the same quarter last year.

A number of other equities research analysts have also issued reports on RCAT. Clear Str raised shares of Red Cat to a "strong-buy" rating in a report on Wednesday, April 29th. LADENBURG THALM/SH SH raised shares of Red Cat to a "strong-buy" rating in a report on Wednesday, May 6th. Wall Street Zen lowered Red Cat from a "sell" rating to a "strong sell" rating in a research report on Saturday, July 18th. HC Wainwright began coverage on Red Cat in a report on Wednesday, May 27th. They issued a "buy" rating and a $20.00 target price on the stock. Finally, Roth Capital started coverage on Red Cat in a research report on Monday, June 1st. They issued a "buy" rating and a $25.00 target price on the stock. Two analysts have rated the stock with a Strong Buy rating, four have given a Buy rating and one has issued a Sell rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Buy" and an average price target of $21.40.

Red Cat Trading Down 0.1%

Shares of RCAT opened at $7.63 on Monday. The business's 50 day moving average is $10.34 and its 200 day moving average is $12.13. Red Cat has a 12-month low of $5.77 and a 12-month high of $18.78. The company has a market capitalization of $936.51 million, a PE ratio of -10.90 and a beta of 1.29.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Arizona State Retirement System raised its position in Red Cat by 3.0% during the fourth quarter. Arizona State Retirement System now owns 29,311 shares of the company's stock valued at $232,000 after purchasing an additional 855 shares during the period. CoreCap Advisors LLC boosted its holdings in shares of Red Cat by 13.8% in the 2nd quarter. CoreCap Advisors LLC now owns 9,039 shares of the company's stock worth $96,000 after purchasing an additional 1,095 shares during the period. Mitsubishi UFJ Asset Management Co. Ltd. increased its position in shares of Red Cat by 0.7% during the 4th quarter. Mitsubishi UFJ Asset Management Co. Ltd. now owns 167,084 shares of the company's stock valued at $1,325,000 after purchasing an additional 1,147 shares during the last quarter. Advisory Services Network LLC increased its position in shares of Red Cat by 5.3% during the 3rd quarter. Advisory Services Network LLC now owns 30,200 shares of the company's stock valued at $313,000 after purchasing an additional 1,507 shares during the last quarter. Finally, Western Wealth Management LLC increased its position in shares of Red Cat by 4.5% during the 1st quarter. Western Wealth Management LLC now owns 36,722 shares of the company's stock valued at $481,000 after purchasing an additional 1,570 shares during the last quarter. Hedge funds and other institutional investors own 37.97% of the company's stock.

Insider Buying and Selling at Red Cat

In other news, Director Paul Funk II sold 165,028 shares of the business's stock in a transaction dated Thursday, June 11th. The shares were sold at an average price of $11.50, for a total value of $1,897,822.00. The transaction was disclosed in a filing with the SEC, which is available through the SEC website. 12.50% of the stock is currently owned by company insiders.

Red Cat News Roundup

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

• Positive Sentiment: Red Cat announced it completed integration of its Black Widow™ drone with C3A Solutions’ OBERON-enabled tactical fires networks, expanding Black Widow’s role as a forward ISR sensor for defense customers and reinforcing the company’s military interoperability story. Article Title
• Neutral Sentiment: Short interest data showed no meaningful change in reported short interest, suggesting the latest trading pressure is being driven more by fundamentals and company-specific headlines than by a clear short-selling shift.
• Neutral Sentiment: Several recent write-ups argued that RCAT may still be overvalued after a strong multi-year run, with valuation models suggesting much of the upside could already be priced in. Article Title
• Negative Sentiment: Investor sentiment was hurt by news that Red Cat terminated Chief Revenue Officer Geoffrey Hitchcock for cause, followed by a civil complaint alleging retaliatory termination and contract breaches, raising governance and internal-control concerns. Article Title
• Negative Sentiment: Recent commentary also pointed to insider selling, a weak recent share-price trend, and uncertainty ahead of earnings, all of which can weigh on near-term sentiment toward RCAT. Article Title

Red Cat Company Profile

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.

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