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RCAT Rule Check

Red Cat Holdings Inc · Aerospace & Defense

Red Cat Holdings Inc against the rules: which it passes, where it lags and what to look at next.

Price
$4.80
Market Cap
$732 M
Next Earnings
In 15 Days

Flags First

4Rules Failed5Cautions
  • Share PriceFail
  • ProfitabilityFail
  • Distance from 52-Week HighFail
  • DilutionFail
  • Quarterly Sales GrowthBase Effect
  • +4 More

Fit ScoreScreened Out

Hits at least one elimination rule; under this approach it stays off the research list whatever its score.

59% of Rules Measured

Company Analysis

Stock Selection Focus · Tool: Claude

Claude writes a second opinion independent of the site's own analysis; while the market is open it reads the live price.

Categories

Growth50Weight 30 · 1 of 4 Measured
Price Strength25Weight 20 · 2 of 4 Measured
Profitability25Weight 15 · 2 of 2 Measured
Financial Health83Weight 15 · 3 of 3 Measured
Ownership0Weight 10 · 1 of 3 Measured
Catalyst Signals50Weight 10 · 1 of 3 Measured

Elimination · FailShare Price

Rule by Rule

59% of Rules Measured

Elimination

3 of 3 Measured
  • Market CapAt least $300M$732 MPass
  • Share PriceAt least $5$4.80Fail
  • Liquidity500K shares and $10M traded per day on average8.64 M SharesPass

Growth

1 of 4 Measured
  • Quarterly EPS GrowthAt least 10% year over year—No Data
  • Quarterly Sales GrowthAt least 10% year over year+ 527.3%Base Effect
  • Three-Year EPS GrowthAt least 10% annualized—No Data
  • Source of GrowthSales should grow at least 5% while profit grows+ 527.3%No Data

Profitability

2 of 2 Measured
  • ProfitabilityPositive trailing twelve-month EPS− $0.80Fail
  • MarginsGross, operating and net margins positive−145.2%Caution

Financial Health

3 of 3 Measured
  • Current RatioAt least 1 — current assets cover current liabilities14.86Pass
  • Debt / EquityAt most 1; above 2 fails0.00Pass
  • Cash RunwayPositive free cash flow or at least two years of cash2.1 YrsCaution

Price Strength

2 of 4 Measured
  • Versus the MarketSix-month return not behind the S&P 500—No Data
  • Versus Its SectorSix-month return not behind the sector fund—No Data
  • Distance from 52-Week LowAt least 30% above the low15.8%Caution
  • Distance from 52-Week HighAt most 25% below the high74.5%Fail

Ownership

1 of 3 Measured
  • DilutionShare count up at most 2% a year+ 53.1%Fail
  • Famous Fund InterestAmong tracked funds, adders not outnumbered by trimmers—No Data
  • Insider ActivityNo heavy net selling over six months−42No Data

Catalyst Signals

1 of 3 Measured
  • Analyst TrendShare of buy ratings rising over three months− 5.0 PtsCaution
  • Upside to TargetAt least 10% to the average target—No Data
  • Quality of the Last ReportEarnings analysis score of at least 60—No Data

In each lane the line is the rule's threshold, the dot is the stock's value and the bar between them is the gap. Market cap, price and volume use a log scale: one step is ten times. A value beyond the end sits at the edge as an open dot.

Rule Bench

41ScoreScreened Out
  • 4Passed
  • 5Caution
  • 4Failed
  • 9No Data
RCAT

Each lamp is a rule: green passed, amber caution, red failed, grey no data. Tap a station to see its rules.

Weaknesses

  • Share price of $4.80, below $5; hits the elimination rule.
  • Trailing EPS of − $0.80; the company is losing money.
  • The price is 74.5% below its 52-week high.
  • Share count up + 53.1% in a year; existing holders are being diluted.
  • Revenue grew + 527.3% year over year last quarter; the rate comes largely from a low base.
  • At least one margin is negative; operating margin −145.2%.
  • Burning cash; at this pace cash lasts about 2.1 years.
  • The price is close to its 52-week low, only 15.8% above it.
  • The share of buy ratings fell 5.0 points in three months.

Strengths

  • Market cap of $732 M, comfortably above the size floor.
  • About 8.64 M shares trade a day; positions open and close easily.
  • Current ratio of 14.86; short-term obligations are well covered.
  • Debt to equity of 0.00; a light debt load.

Next Steps

  1. The company is burning cash. Look for the funding plan (debt, share issuance, cash buffer) in the last report.
  2. The stock is far from its high. Do not treat it as cheap before finding why it fell (results, competition, sector); wait for the price to confirm a turn.
  3. The growth rate is unusually high, most likely off a very low base last year. Read how much revenue and profit grew in dollars, not the rate.
  4. The share count is rising. Check how much growth stays per share: buybacks or new issuance?
  5. Write down the concrete reason for growth: a new product, a contract, management or an industry shift. If you cannot say it in one sentence, waiting may be the better choice.

What You Should Check

  1. Is there a concrete reason for growth, and can you say it in one sentence?
  2. Where does the valuation sit against sector peers?
  3. Does the chart confirm the trend, or are you fighting a falling price?
  4. Is the position size within the loss you could bear if you are wrong?

The score averages the measurable rules with category weights: growth 30, price strength 20, profitability 15, health 15, ownership 10, catalysts 10. A pass counts in full, a caution half; rules we cannot measure stay out. A stock that hits an elimination rule is capped at 45. Growth above 300% counts as a base effect and is marked as a caution.

Sources: prices from Alpaca, fundamentals and analyst ratings from Finnhub, share counts from SEC filings, famous funds from 13F reports, targets and report scores from the site's own analyses.

This is not investment advice; it is a research tool that measures fit with the rules.

Alpaca · SIPUpdated 14:14 NY15 Minutes Delayed

To Understand This

P/E and the Valuation RatiosYou can't tell whether a stock is cheap or expensive by looking at its price.Risk Management: How Much, WhenThe one skill that decides not whether you win, but whether you stay in the game.