Does Redwire’s Recent Contract Win Signal a New Growth Era for the Stock in 2025?

If you have Redwire on your watchlist, you are probably wondering whether the latest jump in price is just the beginning or if you have already missed the rally. Redwire’s stock has moved up 6.9% over the last week, and it has posted a notable 16.7% gain in the last month. Looking at the bigger picture, it has soared nearly 295% over the past three years. This year has been a different story so far, with the stock still down 42.5% year to date. This kind of roller-coaster performance has investors quick to debate whether Redwire is finally breaking out, or if the risks are just being recalibrated.

Those price swings, of course, only tell part of the story. Right now, Redwire receives a valuation score of 2 out of 6. This means it currently screens as undervalued by only two of the six checks analysts use most frequently. That is not a slam dunk, but it does suggest there might be opportunities beneath the surface, especially when sentiment and market conditions shift quickly in this industry. Let us dig into the different ways investors are sizing up Redwire’s value, and near the end, we will look at one method that could offer even deeper insights into where this stock is headed.

Redwire scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Redwire Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today’s dollars. This method aims to capture the value of what Redwire could potentially generate for shareholders, based on data-driven forecasts and industry assumptions.

For Redwire, analysts estimate that its Free Cash Flow (FCF) over the last twelve months stands at -$154.07 million, reflecting recent operating challenges. Despite this, projections are optimistic, with FCF expected to turn positive and reach $73.1 million by the end of 2027. Looking further ahead, ten-year projections suggest continued growth, with estimates rising to over $202 million in 2035. These future figures, provided by both analysts and extrapolated calculations, are all in US dollars.

Based on these projections and the 2 Stage Free Cash Flow to Equity model, the estimated intrinsic fair value for Redwire shares is $18.20. Relative to the current share price, this implies the stock is trading at a 46.2% discount, indicating it is significantly undervalued according to this method.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Redwire.

Our Discounted Cash Flow (DCF) analysis suggests Redwire is undervalued by 46.2%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Redwire Price vs Sales

For companies like Redwire that are not yet profitable, the Price-to-Sales (P/S) ratio is often the best way to compare value. The P/S multiple allows investors to see how much they are paying for each dollar of revenue, which is especially relevant for businesses in growth mode or those not yet generating positive earnings. In general, fast-growing companies can justify higher P/S ratios. Investors tend to give lower multiples to firms with greater risks or weaker growth outlooks.

Currently, Redwire trades at a P/S ratio of 5.81x. That is noticeably higher than the Aerospace & Defense industry average of 3.48x, and above its main peer group’s average of 1.76x. This indicates that the market is either optimistic about Redwire’s revenue potential or seeing qualitative factors that set it apart from most industry players.

To provide a more nuanced benchmark, Simply Wall St’s proprietary “Fair Ratio” incorporates vital details like projected growth, profit margins, risks, industry specifics, and market capitalization. This approach goes beyond simple peer and industry comparisons by adjusting for the company’s unique context and prospects. For Redwire, the Fair Ratio stands at 2.59x. Comparing this to its current P/S of 5.81x suggests that the stock is currently valued much higher than the level justified by its fundamentals and outlook.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Redwire Narrative

Earlier we mentioned there is an even better way to understand valuation, so let us introduce you to Narratives, a smarter approach that connects the story behind a company to its numbers and future potential. A Narrative is your personal take on what makes a company unique, combining your assumptions about future revenue, earnings, and margins to create your own fair value estimate. This method links your view of Redwire’s prospects directly to a financial forecast, helping you see not just what the numbers are, but why they matter.

Narratives are simple to use, available right on Simply Wall St’s Community page, and updated automatically when news or earnings data changes, so your outlook remains current. They allow you to compare your fair value to the current share price and clearly see when a buy or sell opportunity arises, even as the story evolves. For example, on Redwire’s Community, some investors are bullish with a Narrative pointing to a $28.00 fair value, seeing massive revenue growth from space manufacturing and defense, while others are more cautious, estimating just $10.00 due to ongoing risks and execution concerns. Narratives give you a dynamic, actionable framework that ties your research directly to smarter investment decisions.

Do you think there's more to the story for Redwire? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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