📊 Backtest📒 Journal Updated 29/09/2026
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STALE?Report written 59 days ago · at $9.60entry levels may be stale — re-check before acting

RCAT

SpeculativeSMALL CAP
Red Cat Holdings, Inc. · NASDAQ · Industrials / Aerospace & Defense (Small Unmanned Systems)
$9.60
▲ 1.00%
MCap $1.40B
Recovering modestly (intraday range $9.20-$9.83) after the Aug 6, 2026 Q2 earnings-day drop of -5.4% — Q2 revenue grew 527% YoY to $20.19M but still missed consensus by $2.58M, with net loss widening to $35.26M. Trading well below the $18.78 52-week high, above the $5.77 low.
BusinessDefense drone tech · Teal 2/Black Widow small UAS — winner of the U.S. Army's Short Range Reconnaissance (SRR) Program of Record (5,880-system acquisition objective over 5 years), plus steady NATO/Air Force contract flow
Thesis

Red Cat's Q2 2026 revenue grew 527% YoY to $20.19M, but missed Street consensus and the stock fell -5.4% on the print as the net loss widened to $35.26M. The real structural story is the U.S. Army SRR Program of Record win (up to 5,880 Teal systems over 5 years) plus steady contract flow — including a $2.49M Air Force Black Widow order due for delivery by Aug 24, 2026. Consensus analyst targets ($16.50-$22) imply 72-129% upside, but at ~61x sales the market is already pricing in a clean production ramp that Q2's miss puts some doubt on.

📝 Primary Verdict · Core Holding
SPECULATIVESpeculative

SPECULATIVE — real, dated production/delivery catalysts (Aug 24 Air Force Black Widow delivery) sit on top of the SRR Program of Record win, but Q2 2026 results just missed consensus and losses are widening. The 72-129% analyst upside is real but assumes the SRR ramp executes cleanly — size for a loss-making small-cap, not a core holding.

78
score / 100 ⓘ
⚡ Catalyst
🚁 Air Force Black Widow Delivery (Teal subsidiary)2 WEEKS

Contract delivery deadline for the $2.49M U.S. Air Force Black Widow order (awarded Jul 2026) — a real, dated proof point for whether the broader SRR production ramp is executing on schedule.

Aug 24, 2026
📊 Q2 2026 Earnings (reported)PASSED

Reported Aug 6, 2026: revenue $20.19M (+527% YoY) but missed consensus by $2.58M, EPS -$0.26 vs -$0.20 est. Stock fell -5.4% same day despite reaffirmed FY guidance of $150-180M.

Aug 6, 2026
🎯 Entry Point
Entry 1
$9.60
Current price, recovering from the Aug 6 earnings-day dropNow
Entry 2PREFERRED
$7.5–8.2
Post-earnings-miss support zone if the stock retests recent lows before Aug 24If dips
Entry 3
$5.77
52-week low — would need a broad defense-drone selloff or a Black Widow delivery slipDeep dip only
✅ Take Profit
TP1
Base — steady SRR ramp continues, no major surprise
$11.52
+20%
TP2
Bull — Black Widow delivery lands clean and the SRR ramp confirms, hits the conservative TipRanks consensus
$16.5
+71.9%
TP3 🌙
Moon — full 5,880-system SRR trajectory confirmed plus NATO order scale-up, hits the S&P Global consensus
$22
+129.2%
🔴 Stop Loss
Tight Stop
Below the Entry 2 zone — post-earnings-miss support failing
$8.64
-10%
Hard Stop
Approaching the post-Aug-6 lows and toward the 52-week low ($5.77) — would question the SRR production-ramp thesis
$7.68
-20%
Risk / Reward
Entry 1 to hard stop vs TP2 (Bull case)
3.6 : 1
⚠ Strong R/R on paper, but this is a loss-making small-cap that just missed Q2 consensus and fell -5.4% — respect position sizing over the ratio alone
📅 Estimate Date
Air Force Black Widow Delivery
Contract delivery deadline for the $2.49M Black Widow order — real, dated proof point for the SRR production ramp
Aug 24, 2026
n/a
Q2 2026 Earnings (reported)
Revenue $20.19M (+527% YoY) but missed consensus by $2.58M; stock fell -5.4%
Aug 6, 2026
n/a
📈 Stock Timeline
3 snapshots · Jul 22 → Aug 10
Score
▼ 4
58
Jul 22Aug 10
TP2 Target
▼ 3
$16.5
Jul 22Aug 10
Rank
▼ 11
#30
Jul 22Aug 10
📈 Possible Up % — Scenario Spread
Bear
-35%
$6.24
Base
+20%
$11.52
Bull
+71.9%
$16.5
Moon
+129.2%
$22
← downsideupside →
🏛️ Fed / Macro Risk — MEDIUM

Assesses how Fed policy / interest rates / inflation affect this stock — LOW = minimal risk, HIGH = proceed with caution

Rate Outlook
Fed held at 3.50-3.75% on Jul 29, 2026, with 3 of 12 officials dissenting toward a hike — the most hawkish split since 2016. Loss-making small-caps like RCAT ($35.26M quarterly net loss) are sensitive to any risk-off from a hawkish CPI surprise (Aug 12) given their reliance on capital markets access.
Inflation
Core PCE still 3.3% YoY, above target. A hot CPI print could widen credit/financing spreads for cash-burning small-caps specifically, on top of any broad equity risk-off.
Sector Impact
Defense-budget-driven revenue is largely appropriations-based and not directly rate-sensitive, but RCAT's own balance sheet (widening losses, small revenue base) makes financing conditions matter more here than for a profitable defense name.
Summary
MEDIUM — the SRR Program of Record and contract-award flow are structurally macro-independent, but RCAT's cash-burn profile means a hawkish-driven tightening in financing conditions would hit this name harder than a profitable peer.
🎯 Analyst Targets

Wall Street price targets vs the current price — cross-check our TP levels

TipRanks Consensus (2 analysts)
Buy$16.5+72%
S&P Global Consensus (6 analysts)
Strong Buy$22+129%
current price $9.60
🔍 Similar-Catalyst Comparable Check

Stocks that went through similar catalyst events — calibrate whether the +30%+ target is realistic

RCAT✅ GoodJul 2026
+8%
in 1 day
$2.49M U.S. Air Force Black Widow contract award
Same-company precedent for a positive contract-award reaction — directly relevant to the Aug 24, 2026 delivery deadline for this same order.
RCAT❌ BadAug 6, 2026
-5.4%
in 1 day
Q2 2026 earnings — revenue +527% YoY but missed consensus
Same-company precedent for the downside case — even triple-digit YoY growth wasn't enough when the print missed an elevated Street bar.
⚡ Optional Layer · Tactical Overlay
🎯 Catalyst Spot Mode

Short-term play around the catalyst (Sep 2026 earnings) only — an optional overlay, not a verdict that ranks equal to the Core Holding.

⚠️

Use this stop-loss set (-15% / -20%) only when trading the earnings spot — not for the core holding (use the -10% / -20% set above). If you are holding long-term, follow the core set.

📈Pre-Catalyst Run-up Pattern
+8% (the Jul 2026 Air Force order announcement itself)Days around each contract announcement, not weeks of positioning before delivery

Contract-award news drives RCAT's pre-catalyst positioning more than a classic slow build — the $2.49M Air Force order itself produced an +8% pop on announcement (Jul 2026), well before the Aug 24 delivery date itself.

🎲Historical Post-Catalyst Move
✅ Catalyst Winavg +8%
range: +5% to +10%· Jul 2026 (RCAT Air Force Black Widow order)
RCAT's own Jul 2026 Air Force Black Widow contract award drove an +8% same-day pop — the cleanest recent precedent for a positive delivery/contract outcome.
❌ Catalyst Missavg -5.4%
range: -4% to -8%· Aug 6, 2026 (RCAT Q2 2026 earnings)
RCAT's own Q2 2026 earnings (Aug 6, 2026) missed consensus on both revenue and EPS despite 527% YoY growth, and the stock fell -5.4% same day — the direct precedent for a disappointing print/delivery outcome.
💼Spot Position Sizing
How the recommended % is derived
4%
of portfolio

Real dated delivery catalyst (Aug 24) and a structural SRR Program of Record win, but a just-missed Q2 print and widening losses keep this at a moonshot-adjacent size rather than a full core position

🛑Stop Loss · Spot Trade
Spot cut-loss levels — separate from the core holding
Before Catalyst
-15%($8.16)
A break below ~$8.16 before Aug 24 would suggest the market is losing confidence in the SRR production ramp ahead of the delivery date
After Catalyst (Bad Result)-20%
If the Black Widow delivery slips or underwhelms and the stock doesn't stabilize, the production-ramp thesis needs re-examination
📎 Sources

Generated 2026-08-10 · Not financial advice