Why Red Cat Stock Popped Today -- Then Gave It Back

Red Cat Holdings (NASDAQ: RCAT) stock jumped like a proverbial cat on a hot tin roof this morning, soaring more than 11% after preannouncing sales for its Q4 2025. That's the good news.

The bad news is that Red Cat then reversed course and gave back most of those gains. As of 11:45 a.m. ET, Red Cat stock is up only 2.6%.

Image source: Getty Images.

Red Cat Q4 "earnings"

Red Cat expects to book between $24 million and $26.5 million in Q4 revenue, ahead of analyst forecasts. The U.S.-based manufacturer of drones for the military expects revenue to increase by as much as 1,842% year over year.

Wow.

Full-year performance isn't quite that impressive -- but more than good enough to explain the early morning jump. Through the end of 2025, Red Cat says it booked between $38 million and $41 million in total revenue, "an approximate 153% increase."

But do you want to know what Red Cat didn't say?

Is Red Cat stock a buy?

It didn't say it was profitable -- and there may be a reason for that.

Red Cat has never reported a profit, but it sure can pile up the losses, which totaled more than $52 million through the year's first three quarters -- nearly double the losses Red Cat incurred by this point a year ago. Cash burn is pretty miserable, too -- nearly $54 million so far this year.

The good news is that Red Cat still has some cash to tide it over. Cash reserves totaled $184 million, net of debt, at the last report, giving the company perhaps three more years to become self-sufficient -- and Red Cat may need it.

Analysts don't forecast profits before 2028 at the earliest, and probably not even then.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.