Forensic Analysis · Technology / Software · as of Jun 27, 2026
Red Cat Holdings, Inc. (RCAT)
A forensic read on Red Cat Holdings, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Safe
Financial health
10.4
Altman Z-score
Watch
Earnings quality
5
Forensic signals
-36.2%
ROE
$1.1B
Market cap
Red Cat Holdings, Inc. earns a D (Weak — demands caution) forensic quality grade, and its Altman Z-score is 10.4, placing it in the Safe zone. 5 forensic signals were flagged in its latest SEC filings, led by accruals ratio.
What the filings flag
+131.9%Accruals ratio.Net operating assets grew +131.9% relative to their average in FY2025 — the accrual component of earnings. Accruals are building sharply — a large slice of profit sits in operating assets, not cash; Richardson/Sloan link high accruals to weaker future returns as they reverse.
234d DSOReceivables vs revenue.Days sales outstanding moved from 10 to 234 days FY2024→FY2025 (receivables +5249% vs revenue +128%). Receivables are outrunning sales — a flag for aggressive revenue recognition or slipping collections.
-20%Return on invested capital.Return on invested capital is -20% and rising from -66% — well below its ~10% cost of capital, so reinvested dollars may be destroying value, not building it.
+5.2%/yrShare-count dilution.Diluted share count changed +42% over the last 8 years to FY2025 (+5.2%/yr). The count is GROWING — existing holders are being diluted. That's ~5.2% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2017 has been diluted ~42%.
26% of revStock-based comp load.Stock-based compensation ran 26% of revenue in FY2025 — about $0.11 per diluted share. Meaningful — reported free cash flow flatters the economics, since SBC is a real cost paid in shares.
Key fundamentals
Net Margin-177.0%
Debt / Equity0.00x
Free Cash Flow$-35.8M
Latest Revenue$40.7M
Return on Equity-29.3%
Revenue Growth YoY+128.3%
Go deeper — free with an account
The forensic grade and screens above are free — no account needed. An account adds the full interactive deep-dive on Red Cat Holdings, Inc.:
🔒The written investment read — what the numbers mean, in plain English
🔒Ask anything about RCAT's filings — AI Q&A across the 10-K, 10-Qs & 8-Ks
🔒Interactive valuation — reverse-DCF sliders, Monte Carlo & scenario stress
🔒Calibrated 12-month price forecast, with the math shown