On Wednesday, H.C. Wainwright maintained a Buy rating on Redwire (NYSE:RDW) shares with a steady price target of $18.00. Currently trading at $11.84, the space technology company has delivered an impressive 315% return year-to-date, according to InvestingPro data.
The firm's stance comes after Redwire's recent announcement of securing a significant contract with the Air Force Research Laboratory. The contract, valued at $45.5 million over five years, will support the laboratory's Space Vehicles Directorate in providing the joint warfighter with robust space mission capabilities.
The contract, announced on Tuesday, represents a continuation of Redwire's growth strategy, according to the firm. While the deal does not alter the firm's positive view on Redwire's business prospects, it is seen as further evidence of the company's effective execution of its expansion plans.
As Redwire progresses into 2025, the firm anticipates the company will secure additional and more substantial contracts, potentially leading to significant revenue growth.
H.C. Wainwright forecasts a revenue increase for Redwire, projecting a jump to $366.0 million in 2025, an 18.1% rise from the estimated revenue for 2024. The firm believes that Redwire's extensive experience in space operations uniquely positions it to benefit from the accelerating expansion of space-related activities, including exploration, communications, and national defense.
The firm suggests that as Redwire announces larger space contracts, the company's operating leverage should improve. This expectation aligns with the company's strong revenue growth of 27.35% over the last twelve months.
With a market capitalization of $814 million and an overall Financial Health score of FAIR from InvestingPro, the company shows potential for improvement in earnings per share (EPS) and free cash flow, which could attract new investors.
H.C. Wainwright's recommendation for investors is to build positions in Redwire now, in anticipation of future business announcements, reinforcing their Buy rating and $18 price target on the company's shares.
Based on InvestingPro's Fair Value analysis, the stock appears fairly valued at current levels. InvestingPro subscribers have access to 12 additional investment tips and comprehensive financial metrics for Redwire, along with detailed Pro Research Reports that transform complex Wall Street data into actionable intelligence.
In other recent news, Redwire Space reported a 9.6% revenue increase to $68.6 million in the third quarter of 2024, compared to the previous year. The aerospace company reaffirmed its full-year revenue forecast at $310 million, indicating a 27% growth rate, with 76% of the target achieved year-to-date.
Moreover, Redwire announced the acquisition of Harith Systems, a move that is expected to contribute to its revenue and capabilities in national security missions.
The company also highlighted the launch of twenty-eight systems to the International Space Station (ISS) through its Pillbox space pharmaceutical platform, marking significant milestones in drug discovery. Furthermore, Redwire reported a 170% year-over-year increase in contracted iROSA wings, with twenty-five now contracted.
Management, while expressing optimism about future growth and operational efficiency into 2025, also noted a strong pipeline and growth outlook, focusing on larger contracts to enhance revenue and free cash flow. Despite the positive revenue growth, Redwire experienced a significant use of cash in operating activities and negative free cash flow. These are among the recent developments at Redwire Space.
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