Red Cat Holdings, Inc. (NASDAQ:RCAT) experienced a price target drop to $12 from $17 by Needham analyst Austin Bohlig. The company’s strong third-quarter results for fiscal 2025 were overshadowed by a revenue guidance revision attributed to product launch delays and the government shutdown.

Despite the guidance revision, Needham maintains a Buy rating for RCAT, citing the Short Range Reconnaissance Tranche 2 (SRR T2) program as a significant opportunity, despite potential delays until Q1 of 2026. RCAT’s shares have dropped 48% year-to-date, presenting a buying opportunity according to Bohlig.

Red Cat Holdings, Inc. (NASDAQ:RCAT) reported a 646% surge in quarterly revenue to $9.6 million during the third quarter, with a diluted loss per share of $0.16. The company ended the quarter with $212.5 million in cash and receivables. For the fourth quarter, RCAT projects revenue of $20 million to $23 million.

RCAT’s offerings include services and solutions for the drone industry. While acknowledging RCAT’s investment potential, there are AI stocks with greater upside potential and lower downside risk. Investors are encouraged to explore undervalued AI stocks for potential opportunities.

For more investment insights, check out the 13 Most Undervalued Stocks Under $20 to Buy and ChatGPT Stock Advice: Top 8 Defense Stocks. Disclosure: None.

Read more at Yahoo Finance: Needham Cuts Red Cat Holdings Inc. (RCAT)’s Price Target To $12, Maintains Buy Rating