Market Pulse50Neutral

Red Cat Holdings, Inc.Opportunity Rank #325(RCAT) Intrinsic Value & DCF Analysis (2026)

Sector: Technology

Current Price

$15.15

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$15.15
Price
$1.06
Intrinsic Value
Overvalued by 93%MOS: $0.85

Fundamental Score

3/100
Bearish

Weighted across 6 signals

Narrative Score

61/100
Improving

+3 vs previous

The intrinsic value of Red Cat Holdings, Inc. (RCAT) is estimated at $1.06 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $15.15, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a -29.02% long-term growth rate and a 10.37% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Red Cat Holdings, Inc. (RCAT) is estimated at $1.06 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $15.15, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a -29.02% long-term growth rate and a 10.37% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$1.06
▼ -93.00% downside
20% margin of safety: $0.85
Years: 10Growth Rate: -29.02%
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Capital Efficiency

Average Quarterly ROIC
-22.71%
Cost of Capital (estimated)7%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

3/100
BearishWeighted across 6 signals
DCF Discount
93.0% premium to price
0
FCF Yield
-1.4% trailing FCF yield
0
ROIC vs WACC
ROIC -22.7% vs WACC 7.0% (-3.2x)
0
Net Debt / FCF
8.2x net debt to FCF
0
Buybacks
Share count growing
30
FCF CAGR (5Y)
-58.6% 5Y FCF CAGR (adjusted)
0
Pressure from: DCF Discount, FCF Yield.

Narrative Details

61/100
Improving
+3 vs previous · +1 new driversVs 6-Month Baseline:Above Avg (76th pct)Weighted across 4 recent drivers
Trend: StableConfidence: 87%Updated: 57m ago
Sources: 43 (39 News · 4 Analyst)
Drivers(last 30 days)
31 news sentiment+0.6
7 regulatory scrutiny+0.4
Downgrade headlines+0.0
4 analyst reiterations0.0

Investment Coach

Updated 15h ago
AVOIDConfidence: 90%
Thesis
Red Cat Holdings, Inc. is significantly overvalued with its current price nearly 96% above estimated fair value, supported by weak fundamentals including negative returns on invested capital and high leverage. Despite a stable and improving narrative score, the company's financial health and cash flow metrics remain concerning.
Key Risk
The company's elevated leverage and negative spread between ROIC and WACC pose substantial risks to its financial stability and valuation.
Signals To Watch
  • Price movement to at least a mid-teens discount to fair value.
  • Sustained improvement in ROIC versus WACC spread.
  • Meaningful shifts in the narrative trend score direction.
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR (Adjusted): -29.06%5 Year CAGR (Adjusted): -45.06%

Free Cash Flow (in millions)

TTM20242024202320222021202020192017201620152014201320122011201020092008200720062005
-$20-$18-$20-$27-$16-$1-$1$0-$1-$20$0$$00$0$0$$0$00$0$0$

How Intrinziq Estimates Fair Value

Intrinziq estimates Red Cat Holdings, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Red Cat Holdings, Inc.Technology

Red Cat Holdings, Inc., through its subsidiaries, provides various products, services, and solutions to the drone industry. It offers commercial and government unmanned aerial vehicle technology for reconnaissance, public safety, and inspection applications. The company also provides First Person View (FPV) video goggles; and software and hardware solutions that enable drones to complete inspection services in locations where global positioning systems are not available. In addition, it is involved in the sales of FPV drones and equipment primarily to the consumer marketplace. Red Cat Holdings, Inc.is based in San Juan, Puerto Rico.