Cantor Fitzgerald maintains $28 target on Redwire shares

On Tuesday, Cantor Fitzgerald reiterated its Overweight rating on Redwire (NYSE:RDW) with a steady price target of $28.00, significantly above the current stock price of $10.28. The firm’s analyst, Colin Canfield, anticipates that Redwire will outperform due to its sales and profitability guidance for 2025, which exceeded expectations. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $21 to $30, suggesting significant upside potential. The stock currently appears undervalued based on InvestingPro’s Fair Value analysis. Canfield believes Redwire’s use of Enterprise Architecture (EA) will solidify its position as a top provider for urgent security needs, particularly for international allies.

Redwire’s recent performance has been less than optimal, with the stock declining nearly 10% in the past week and showing significant volatility. While the company faces negative Earned Value Adjustments (EACs) due to unforeseen additional labor, design, and testing cycles, InvestingPro data shows strong revenue growth of 27.35% in the last twelve months. These setbacks have occurred across various Space businesses, though the company maintains a moderate debt level with a debt-to-capital ratio of 0.13. Despite these challenges, the analyst suggests that the market’s reaction to Redwire’s underperformance, which has been influenced by broader selling pressures on risk assets, may be exaggerated and not entirely reflective of the company’s fundamentals.

Canfield notes that although the quarterly results may not significantly boost Redwire’s performance, the overall market conditions are expected to improve. This improvement would come as the Department of Defense (DoD) budget is likely to increase next year, and international allies may increasingly rely on U.S. commercial companies like Redwire. The analyst anticipates that the market will eventually recognize and assign a premium to companies with insulated growth models, which he refers to as "risk on by risk off."

In summary, despite some negative factors affecting Redwire’s recent performance, Cantor Fitzgerald maintains confidence in the company’s long-term prospects. The firm expects that the current headwinds will subside and that Redwire’s strategic positioning and market dynamics will enable it to re-rate positively in the future. InvestingPro subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, offering deeper insights into Redwire’s financial health, growth prospects, and valuation metrics among the 1,400+ stocks covered.

In other recent news, Redwire Corp reported its fourth-quarter 2024 earnings, which revealed an earnings per share (EPS) of -1.38, significantly missing the forecasted -0.18. The company’s revenue for the quarter was $69.6 million, falling short of the expected $74.82 million. Despite these misses, Redwire achieved a 24.7% year-over-year increase in full-year revenue, reaching $304.1 million. The company also expanded its facilities and completed the acquisition of Edge Autonomy, indicating strategic growth efforts. Looking forward, Redwire forecasts combined revenue of $535-$565 million for 2025, with an adjusted EBITDA projected between $70-$105 million. Analysts from firms like Jefferies and H.C. Wainwright provided insights during the earnings call, highlighting both challenges and growth opportunities. The company aims to be free cash flow positive in 2025, driven by its strategic initiatives and recent acquisition.

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