Shares of Red Cat Holdings Inc. (NASDAQ: RCAT) experienced a sharp 9.04% decline in a 24-hour period, following the release of the company's disappointing third-quarter financial results. The drone technology firm's earnings report, which fell significantly short of analyst expectations, triggered a sell-off that extended beyond the regular trading session.
Red Cat Holdings reported a quarterly loss of $0.16 per share, missing the analyst consensus estimate of $0.10 by 60%. The company's revenue, while showing a remarkable year-over-year increase of 646.59% to $9.646 million, still fell short of the expected $16.675 million by 42.15%. This substantial miss on both earnings and revenue metrics contributed to the intensified sell-off.
Adding to investor concerns, Red Cat Holdings lowered its full-year 2025 revenue guidance to a range of $34.5 million to $37.5 million, down from prior guidance of $80 million to $120 million. This significant reduction in expected annual revenue further fueled the negative sentiment surrounding the stock. Despite the company's impressive year-over-year revenue growth, the substantial underperformance relative to market expectations appears to have overshadowed this achievement, leading investors to reassess the company's near-term growth prospects and financial health.
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