Red Cat Holdings Inc (NASDAQ:RCAT) shares are plunging ahead of its first‑quarter earnings report, scheduled for Thursday, May 7 after the close. Here’s what you should know.
- Red Cat Holdings stock is taking a hit today. Why is RCAT stock dropping?
Wall Street expects a loss of $0.13 per share on $17.63 million in revenue, and the stock may be feeling pressure as traders brace for a sharp comedown from last quarter’s explosive finish to 2025.
A Sharp Contrast With Last Quarter’s Results
The weakness comes as investors compare tomorrow’s expectations with the company’s exceptionally strong fourth quarter. Red Cat reported $26.2 million in fourth-quarter revenue, a dramatic increase from the prior year and a 172% sequential jump. Full‑year 2025 revenue reached $40.7 million, up 161% from the previous year.
Strong Momentum Highlighted In Q4
Last quarter’s update underscored how quickly the company was expanding. Red Cat secured new Black Widow drone orders from an Asia‑Pacific ally, expanded its manufacturing footprint to 254,000 square feet, and used its February Innovation Day to showcase its evolution into a multi‑domain autonomous defense platform, including live demonstrations of new USVs operating with Black Widow drones.
RCAT And The Problem With Living Below Every Moving Average
Technically, RCAT is trading below every major moving average, a setup that typically keeps rallies “sold” until price can reclaim those trend lines. The stock is 17.8% below the 20-day SMA, 25.1% below the 50-day SMA, 19.1% below the 100-day SMA, and 9.3% below the 200-day SMA, an alignment that says the intermediate trend has cooled, even if the longer-term story still has teeth with the stock up 82.13% over the last 12 months.
Momentum is also losing altitude: MACD is below its signal line and the histogram is negative, pointing to weakening upside pressure versus the prior upswing. In plain terms, when MACD sits under its signal line, buyers are no longer driving—unless the stock can quickly rebuild momentum.
- Key Support: $9.50 — a nearby level where buyers previously stepped in, making it a practical “line in the sand” if selling continues
Technology Leads, RCAT Lags
The sector backdrop is doing bulls no favors precisely because it’s so strong. RCAT is underperforming the Technology sector today, sliding 6.59% while XLK gains 2.31%, a gap of 8.91 percentage points. Technology is the No. 1 sector out of 11 on the session, and it’s up 21.25% over the last 30 days and up 20.07% over the last 90 days.
When the leading sector is green and a stock is sharply red, traders tend to treat bounces as tactical — something to trade, not marry — until relative strength improves. In other words, the market is offering cover, and RCAT is still slipping.
RCAT Shares Are Plummeting
RCAT Price Action: Red Cat shares were down 4.36% at $10.52 at the time of publication on Tuesday, according to Benzinga Pro.
Image: MacroEcon/Shutterstock
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