$RCAT (-0,85 %) Red Cat Holdings - hot small cap or hot balloon?

I took a closer look at the shares of Red Cat Holdings (RCAT). After a price increase of over +300% in 2024, the company is definitely on the radar of many speculative investors. But is it worth getting in?

What does Red Cat actually do?

The company is based in Puerto Rico and builds military drones with its subsidiary Teal Drones - specifically for ISR missions (Intelligence, Surveillance, Reconnaissance). The company has been part of the US Department of Defense's Blue UAS program since 2023. This is a real seal of quality in the defense sector.

A look at the figures:

Turnover 2023: USD 17.8 million

Net loss: USD -24 million

Cash burn rate: high - operating margin at -100%

Market capitalization: approx. USD 470 million

Current share price: around USD 5.07

Price/sales ratio (P/S): over 25 - sporty.

Where is the potential?

Red Cat could be a strategic beneficiary of the current global arms race. Drones are becoming massively more important - also within NATO. However, the company is still far from profitable and dependent on government contracts.

So is it in or out?

My conclusion:

Red Cat is a classic moonshot: lots of hype, lots of hope - but also lots of risk. It would be nothing for my core portfolio. But as a speculative 1-2% addition to a diversified portfolio? Definitely worth considering - especially in the event of a setback below USD 4.

There is $RCAT (-0,85 %) what does it take drone shield.

Red Cat Holdings Inc. is a Puerto Rico-based provider of products, services and solutions for the drone industry. The company provides its services to the corporate, military and consumer markets. It designs, develops, markets and sells drone software and products.

Red Cat Holdings Inc (NASDAQ: RCAT) made headlines despite disappointing quarterly figures: The drone specialist's shares rose by a whopping 26% in yesterday's trading before correcting by 15% after the quarterly report was presented. The reason for investors' continued hope lies in the forward-looking strategic partnerships and the clear focus on the defense market.

1st major contract from the US Army - SRR program

The Black Widow was selected as the winner of the US Army's Short-Range Reconnaissance (SRR) program. Its revolutionary features position it as an indispensable tool on the battlefield:

- GPS-independent navigation: working with Palantir (NASDAQ: PLTR), the drone integrates AI-powered visualization for GPS-free operational capability in dynamic environments.

- Resistance to electronic warfare - a decisive advantage in modern conflict scenarios.

The SRR program alone offers a revenue potential of several billion USD. The Palantir integration generates additional revenue through high-priced software solutions and is expected to lead to a significant increase in margins.

https://aktien-mag.de/nachrichten/hot-news/red-cat-holdings-strategische-vision-des-drohnenspezialisten-uberstrahlt-schwache-zahlen/p-132927

Earnings next week.

Not much will happen before the holidays.

$RCAT (-0,85 %)
$GIS (-0,06 %)
$MU (-0,15 %)
$LEN (+0,01 %)
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$FDX (-0,34 %)
$CCL (+0,1 %)

But very interesting companies that might be found in one or the other portfolio here.

A successful week before the holidays.🙋🏼‍♂️

Earnings next week 🗓️

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