Redwire is very undervalued, Roth says

Following the company’s fourth quarter results, Roth analyst Suji Desilva has maintained his “Buy” rating on Redwire (Redwire Stock Quote, Chart, News, Analysts, Financials NYSE:RDW).

On March 10, RDW reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted an Adjusted EBITDA loss of $9.2-million on revenue of $69.6-million, a topline that was up 9.6%, year-over-year.

“Redwire continues to execute against its core business while moving up the value chain, supported by accretive M&A. As a result, we have a strong and sustainable foundation for success in 2025,” stated Peter Cannito, Chairman and Chief Executive Officer of Redwire. “We see strong demand for our products in space and defense tech and continue to differentiate ourselves in the market with innovative technologies and strong financial performance.”

Desilva summarized the report.

“RDW reported continued 4Q24 revenue growth with steady LTM bookings for the company,” he wrote. “We are encouraged by the growth in the submitted bid value in the quarter to ~$1.2bn indicating that RDW is increasingly bidding for larger pipeline program opportunities. Management continues to expect organic revenue growth of 20+% y/y in CY25 with incremental revenue and profitability contribution for the pending Edge Autonomy acquisition.”

In a research update to clients March 26, Desilva maintained his “Buy” rating and 12-month price target of $30.00 on Redwire.

The analyst thinks the company will post an EPS loss of $0.34 on revenue of $470.2-million in fiscal 2025. He expects those numbers will improve to EPS of $0.20 on revenue of $650.0-million in fiscal 2026.

“We believe RDW continues to have reasonable visibility with LTM bookings declining just 9% q/q despite LTM B:B contracting to 0.76,” Desilva added. “We are encouraged by a steady contracted backlog coupled with ‘24 pipeline bids increasing $1.2bn in the quarter to over $4bn. As RDW increasingly targets large $100+m lifetime program value bids, we believe the competitive landscape thins to companies with track records and proven space heritage. With support of increasing ROSA solar wing platform programs, key spacecraft component programs and an expanding microgravity pharma opportunity, we are encouraged by the nearly ~$300m contract backlog coverage of our organic RDW CY25 revenue expectation of $375m. Our model assumes a 2Q25 close of the company’s Edge Autonomy acquisition which would contribute a nearly $200m incremental revenue run-rate and significantly improves the company’s profitability position.”