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On Tuesday, Redwire Corporation (NYSE:RDW), which has seen an impressive 111% surge over the past six months according to InvestingPro data, retained its Buy rating and a price target of $21.00, as confirmed by Jefferies analysts. The endorsement follows Redwire's announcement of a definitive agreement to acquire Edge Autonomy, a company specializing in uncrewed airborne systems. The transaction is valued at $925 million, to be paid in a combination of cash and stock.
The acquisition is based on a deal multiple of 4.2 times sales and 12.8 times last twelve months (LTM) EBITDA. Edge Autonomy is recognized for its double-digit sales growth and approximately 32% EBITDA margins. According to Jefferies, this move strategically positions Redwire, currently valued at $981 million, to expand its operations into multi-domain activities, encompassing both space and uncrewed aerial systems (UAS).
The financial implications of the deal are significant for Redwire, with projections indicating over threefold accretion to EBITDA and a near-term pathway to achieving 20% EBITDA margins. The growth trajectory for double-digit (DD) growth is expected to be further bolstered by this acquisition.
Jefferies analysts highlight the transaction as a pivotal strategic expansion for Redwire, enabling the company to operate across multiple domains. The acquisition of Edge Autonomy is seen as a transformative step for Redwire, enhancing its capabilities in the rapidly growing uncrewed systems market. InvestingPro analysis reveals strong momentum with 27% revenue growth and multiple positive indicators. Get access to the comprehensive Pro Research Report and 8 additional ProTips for deeper insights into Redwire's potential.
In other recent news, Redwire Corporation has been making significant strides in the aerospace sector. The company recently reported a 9.6% increase in revenue, reaching $68.6 million for the third quarter of 2024. This growth aligns with Redwire's full-year revenue forecast of $310 million, marking a 27% growth rate with 76% of the target achieved year-to-date.
Significant contracts are also on the horizon for Redwire. The company recently secured a $45.5 million contract with the Air Force Research Laboratory, supporting the laboratory's Space Vehicles Directorate. This contract, spanning five years, is viewed by H.C. Wainwright as further evidence of Redwire's effective execution of its expansion plans. The firm maintains a Buy rating on Redwire shares, forecasting a revenue increase to $366.0 million in 2025.
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