Red Cat: A Drone’s Ascent & Investor’s Caution

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Red Cat Holdings (RCAT +6.80%) – a name that sounds suspiciously like a feline conspiracy – recently announced preliminary Q4 2025 sales figures. A rather robust 1,842% increase, they claim, translating to a sum between $24 and $26.5 million. A figure, let us observe, that would once have purchased a small principality. Now, it merely buys a lot of propellers.

And so, the shares are fluttering upwards again, enjoying a further 3.7% gain this morning. The instigator? Northland Capital, naturally. Analysts, you see, are like fortune tellers, except they use spreadsheets instead of crystal balls – and are paid handsomely for the privilege of being wrong.

Northland’s Affection

Northland, in a display of bullish enthusiasm, has raised its price target on Red Cat stock to $22 per share, while simultaneously reiterating an ‘outperform’ rating. One wonders if they also offer interior decorating services for optimists. They posit that Red Cat’s Q4 sales demonstrate an ability to ‘rapidly scale production.’ A charming phrase, suggesting a company that grows not organically, but through sheer force of will… and perhaps, a generous line of credit.

They further declare Red Cat “uniquely positioned” as a drone vendor. A bold statement in a field crowded with companies all vying to fill the skies with buzzing metal insects. As for the FCC’s recent ban on foreign-made drones, it presents a rather interesting situation. A protectionist measure, naturally, designed to stimulate domestic production. Or, as some might cynically suggest, a convenient excuse to inflate prices.

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A Bird in the Hand…?

However, let us not be swept away by the prevailing optimism. The FCC ban, while potentially beneficial, does not automatically transform Red Cat into a monopoly. The company’s impressive Q4 gains, even annualized, yield a modest $100 million in revenue. A respectable sum, certainly, but a mere sparrow compared to the eagle that is AeroVironment (AVAV 4.66%), which rakes in a cool $1.4 billion annually.

And, crucially, AeroVironment is profitable. Red Cat, alas, is not. A rather fundamental distinction, wouldn’t you agree? It is one thing to sell dreams, and quite another to deliver actual earnings. One might even say, it’s the difference between a magician and an accountant.

Until Red Cat demonstrates a capacity for both sales and profitability, this investor remains decidedly skeptical. A drone may soar, but a stock needs more than lift to truly fly. It requires, shall we say, a solid landing gear of financial prudence.

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2026-01-20 18:52