Redwire Stock To $10?

Redwire (RDW) stock has jumped 30% during the past day, and is currently trading at $14.20. Our multi-factor assessment suggests that it may be time to sell RDW stock. We have, overall, a pessimistic view of the stock, and a price of $10 may not be out of reach. We believe there are several things to fear in RDW stock given its overall Weak operating performance and financial condition. In addition, keeping in mind its High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $2.1 Bil in market cap, Redwire provides mission-critical space solutions, components, and proprietary software for advanced digital engineering, modeling, and simulations across national security, civil, and commercial markets.

[1] Valuation Looks High

This table highlights how RDW is valued vs broader market. For more details see: RDW Valuation Ratios

[2] Growth Is Inconsistent

• Redwire has seen its top line grow at an average rate of 28.3% over the last 3 years
• Its revenues have fallen -0.6% from $298 Mil to $296 Mil in the last 12 months
• Also, its quarterly revenues grew 50.7% to $103 Mil in the most recent quarter from $69 Mil a year ago.

This table highlights how RDW is growing vs broader market. For more details see: RDW Revenue Comparison

[3] Profitability Appears Very Weak

• RDW last 12 month operating income was $-142 Mil representing operating margin of -48.0%
• With cash flow margin of -49.3%, it generated nearly $-146 Mil in operating cash flow over this period
• For the same period, RDW generated nearly $-208 Mil in net income, suggesting net margin of about -70.3%

This table highlights how RDW profitability vs broader market. For more details see: RDW Operating Income Comparison

[4] Financial Stability Looks Strong

• RDW Debt was $229 Mil at the end of the most recent quarter, while its current Market Cap is $2.1 Bil. This implies Debt-to-Equity Ratio of 10.7%
• RDW Cash (including cash equivalents) makes up $54 Mil of $1.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 3.8%

[5] Downturn Resilience Is Very Weak

RDW has fared much worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• RDW stock fell 87.3% from a high of $13.19 on 26 October 2021 to $1.68 on 28 December 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 25 November 2024
• Since then, the stock increased to a high of $25.66 on 13 February 2025 , and currently trades at $14.20

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read RDW Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

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