Fact based stock research
Red Cat (NasdaqCM:RCAT)

US75644T1007

How to read the ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Red Cat stock research in summary

redcatholdings.com

ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Red Cat (Electronic Equipment, USA) shares have much better financial characteristics than comparable stocks. Shares of Red Cat are a good value (attractively priced) with a consolidated Value Rank of 52 (better than 52% of alternatives), show above-average growth (Growth Rank of 88), and are safely financed (Safety Rank of 55), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Red Cat's financial characteristics. As the company Red Cat's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 52), above-average growth (Obermatt Growth Rank of 88), and indicate that the company is safely financed (Obermatt Safety Rank of 55), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Red Cat. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	52
Growth Rank	88
Safety Rank	55
Combined Rank	86

Country	USA
Industry	Electronic Equipment
Index	NASDAQ
Size class	X-Small

18-Apr-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Red Cat

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	91	45	52
GROWTH
GROWTH	n/a	95	82	88
SAFETY
SAFETY	n/a	45	55	55
SENTIMENT
SENTIMENT	n/a	61	16	^new
360° VIEW
360° VIEW	n/a	99	43	^new

Most recent update of the stock research: 18-Apr-2024. Financial reporting date used for calculating ranks: 31-Jan-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Red Cat is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	91	45	52
GROWTH
GROWTH	n/a	95	82	88
SAFETY
SAFETY	n/a	45	55	55
COMBINED
COMBINED	n/a	92	76	86

Last update of combined financial performance: 18-Apr-2024. Stock analysis on combined financial performance: The higher the rank of Red Cat the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 52 (better than 52% compared with alternatives), Red Cat shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Red Cat. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 69, which means that the stock price is lower compared with invested capital than for 69% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 49 which means the stock price compared with what market professionals expect for future profits is higher than 51% of comparable companies, indicating a low value concerning Red Cat's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 69 and for the dividend yields rank which is lower than for 99% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 52, is a buy recommendation based on Red Cat's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Red Cat, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	69	34	49
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	96	22	22
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	96	81	69
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	1	1
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	91	45	52

Last update of Value Rank: 18-Apr-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Red Cat; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 88 (better than 88% compared with alternatives) for 2024, Red Cat shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Red Cat. Sales Growth has a value of 100, which means that, currently, professionals expect the company to grow more than 100% of its competitors. The same is valid for Profit Growth with a value of 59 and for Capital Growth with 99. In addition, Stock Returns had an above-average rank value of 50, which means they have been higher than 50% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 88, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Red Cat exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	100	94	100
PROFIT GROWTH
PROFIT GROWTH	n/a	68	55	59
CAPITAL GROWTH
CAPITAL GROWTH	n/a	91	99	99
STOCK RETURNS
STOCK RETURNS	n/a	51	19	50
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	95	82	88

Last update of Growth Rank: 18-Apr-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Red Cat.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 55 (better than 55% compared with alternatives), the company Red Cat has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Red Cat is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Red Cat.Leverage is at 67, meaning the company has a below-average debt-to-equity ratio. It has less debt than 67% of its competitors.Refinancing is at a rank of 85, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 85% of its competitors. Liquidity is at 10, meaning that the company generates less profit to service its debt than 90% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 55 (better than 55% compared with alternatives), Red Cat has a financing structure that is safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. Investors should compare Obermatt’s Value, Growth, and Sentiment Ranks before deciding. They may also want to investigate why cash flows are expected to be low, making debt service for Red Cat more challenging. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	37	66	67
REFINANCING
REFINANCING	n/a	97	93	85
LIQUIDITY
LIQUIDITY	n/a	28	10	10
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	45	55	55

Last update of Safety Rank: 18-Apr-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Red Cat and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	70	74	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	1	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	23	4	^new
MARKET PULSE
MARKET PULSE	n/a	56	50	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	61	16	^new

Last update of Sentiment Rank: 18-Apr-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Red Cat.
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