Should you buy Red Cat Holdings stock? (December 2024)

Published first at https://www.3minutebreakdowns.com
Red Cat Holdings stock analysis. Ticker: $RCAT

This small cap stock just won a major contract and its shares are up 800%. Red Cat Holdings is a drone technology company that recently announced a partnership with the US army, beating out 37 rivals. It seems the army has placed an order for Red Cat’s Black Widow drone product.

At the latest price, Red Cat Holdings has a market valuation of 613 million and an enterprise value of 605 million. The company has reported 19 million dollars of revenue over the last 12 months with negative net income and free cash flow. But what’s important is what Red Cat can earn in the future, not the past.

And the bull case for Red Cat Holdings was best summed up in the company's recent conference call. CEO Jeffrey Thompson said that Red Cat expects 50-55 million dollars in revenue next year plus another $79 million from the US army contract. That puts next year’s revenue around $120 million which puts Red Cat’s valuation at about 5 times sales. And that looks cheap considering peers like Skydio trade at 22 times revenue, Anduril trades at 28 times revenue and Shield AI at 18 times revenue.

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