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Tuesday, RedCloud Holdings plc (NASDAQ:RCT), currently trading at $1.56 with a market cap of $69 million, received a positive outlook from Roth/MKM as the firm initiated coverage with a Buy rating and a price target of $5.00. The B2B E-commerce Tech platform, which specializes in the wholesale buying and selling of consumer goods in emerging markets, recently went public on March 21, 2025, securing $20 million in capital.
According to Roth/MKM, the funds raised by RedCloud Holdings should be enough to reach free cash flow (FCF) break-even by early 2026. InvestingPro data shows the company is currently burning through cash with negative free cash flow of -$26.9 million and carries total debt of $48.7 million. The analysts at Roth/MKM believe that RedCloud offers a highly asymmetric long-term investment opportunity. They see the potential for significant growth in the African and Latin American markets where the company operates.
The analysts underscored the upcoming catalysts for RedCloud, including product footprint expansion, increased adoption of artificial intelligence, and an expected financial inflection point. While the stock has shown recent momentum with a 24% gain over the past week, InvestingPro analysis indicates high price volatility and notes that the company remains unprofitable with -$28.2 million in EBITDA. These factors contribute to the firm’s optimistic view of the company’s future performance.
The initiation of coverage by Roth/MKM comes after RedCloud’s successful initial public offering, where the company raised substantial funds to fuel its growth and expansion strategies. The target price set by the analysts reflects their confidence in the company’s business model and its ability to capitalize on the growing demand in its target markets.
RedCloud Holdings’ strategy to facilitate B2B transactions in emerging markets positions it to take advantage of the secular growth trends in these regions. The company’s focus on AI adoption is also expected to enhance its platform’s capabilities and efficiency, further solidifying its market position. InvestingPro rates the company’s overall financial health as ’WEAK’ with a score of 1.37 out of 5, with subscribers having access to 11 additional key insights about the company’s performance and outlook.
In other recent news, RedCloud Holdings plc has begun trading its ordinary shares on the Nasdaq Capital Market under the ticker symbol “RCT.” The shares opened at $4.50 per share, matching the initial public offering (IPO) price. The company announced that its IPO includes 4,444,445 ordinary shares, priced at $4.50 each, with anticipated gross proceeds of approximately $20 million before underwriting discounts and offering expenses. Additionally, RedCloud has granted underwriters a 30-day option to purchase up to an additional 666,666 ordinary shares to cover any over-allotments. Roth Capital Partners (WA:CPAP) and Clear Street LLC are the joint book-running managers for this offering. These developments mark a significant step for RedCloud in its market debut.
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