This is a Scorecard review, revisiting a past LF0 research call against what actually happened.
Ticker: RCAT Rating: Sell Published: 2026-07-22 Checkpoint: 2026-09-22 Entry price: $7.83 Latest price: $6.95 as of 2026-09-21 Stock return since entry: -11.2% Signal return: +11.2% Verdict: Correct so far
This is the 2-month checkpoint for this call. LF0 publishes monthly Scorecard updates through month 6, using the closest available daily close on or before the checkpoint date.
Read the original LF0 analysis
What I Said
I rated RCAT a Sell because I thought the core issue was still unresolved: the company had a promising defense qualification moat and the SRR program was lifting revenue, but the reported economics were still far too weak. I pointed to TTM operating margin of -176%, net margin of -138%, and FCF margin of -163.4% as evidence that the business was not yet converting that strategic position into durable cash generation. I also said I would need to see two straight quarters above $20M in revenue and a gross margin materially above 7.5% before I would reconsider.
Peer Comparison
| Company | Return Since Entry |
|---|---|
| RCAT (this call) | -11.2% |
| AVAV | +4.9% |
| DPRO | +29.7% |
| KTOS | -0.9% |
| ONDS | -7.3% |
Why It’s Working (Or Not)
So far, following the Sell has worked: if I had shorted RCAT at my entry price, I would be up 11.2% to date. The stock has also moved lower while the peer set has been mixed to higher overall, which is consistent with my view that RCAT was not simply riding the same defense-trade backdrop as the group. What has been validated is the part of my thesis about weak economics and the lack of proof that the SRR ramp was translating into durable profitability. I cannot claim the full case is closed yet, but the numbers have not forced me to abandon the original Sell.
What Could Still Prove Me Wrong
I would be wrong if RCAT can show that the SRR ramp is truly durable by posting two consecutive quarters above $20M in revenue and a gross margin meaningfully above 7.5%. I would also have to see operating margin move toward breakeven instead of staying deeply negative, because that was the clearest line between a real business inflection and a temporary revenue spike. If operating cash outflow stays heavy or the company needs another financing before cash flow improves, that would reinforce my original concern rather than disprove it.
The July 2026 Cohort
Other directional calls published the same month:
| Ticker | Rating | Entry | Latest | Stock Return | Signal Return | Verdict |
|---|---|---|---|---|---|---|
| NLST | Sell | $2.44 | $5.10 | +109.0% | -109.0% | Incorrect so far |
| BMNR | Sell | $17.74 | $28.25 | +59.2% | -59.2% | Incorrect so far |
| RDW | Sell | $8.99 | $11.60 | +29.0% | -29.0% | Incorrect so far |
| QUBT | Sell | $7.43 | $8.96 | +20.6% | -20.6% | Incorrect so far |
| MARA | Sell | $11.67 | $13.28 | +13.8% | -13.8% | Incorrect so far |
| FTNT | Sell | $156.25 | $175.23 | +12.1% | -12.1% | Incorrect so far |
| VSAT | Sell | $69.54 | $76.38 | +9.8% | -9.8% | Incorrect so far |
| HUT | Sell | $98.33 | $103.42 | +5.2% | -5.2% | Incorrect so far |
| SMR | Strong Sell | $8.81 | $8.79 | -0.2% | +0.3% | Correct so far |
| AMBA | Sell | $72.90 | $68.85 | -5.6% | +5.6% | Correct so far |
| TPL | Sell | $408.26 | $366.80 | -10.2% | +10.2% | Correct so far |
| CIFR | Sell | $21.85 | $18.90 | -13.5% | +13.5% | Correct so far |
| ONTO | Sell | $319.32 | $275.98 | -13.6% | +13.6% | Correct so far |
| AMKR | Sell | $60.60 | $52.19 | -13.9% | +13.9% | Correct so far |
| TTWO | Sell | $247.62 | $209.92 | -15.2% | +15.2% | Correct so far |
| UAN | Buy | $110.58 | $129.10 | +16.7% | +16.7% | Correct so far |
| MYRG | Sell | $391.51 | $288.45 | -26.3% | +26.3% | Correct so far |
| MTZ | Sell | $380.63 | $222.90 | -41.4% | +41.4% | Correct so far |
| FLNC | Sell | $14.42 | $7.39 | -48.8% | +48.8% | Correct so far |
Live LF0 scorecard: The Scorecard | Research Performance dashboard
Past performance does not guarantee future results. Nothing here is investment advice or a recommendation to buy or sell securities. Returns use LF0’s daily-close scorecard methodology.
Leave a Comment