Earnings Update: Redwire Corporation (NYSE:RDW) Just Reported And Analysts Are Boosting Their Estimates

Redwire Corporation (NYSE:RDW) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like weak result overall, with ongoing losses and revenues of US$61m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share (statutory) loss of US$0.09 being 74% smaller than what the analysts had presumed. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Redwire from five analysts is for revenues of US$461.0m in 2025. If met, it would imply a substantial 66% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 98% to US$0.03. Before this latest report, the consensus had been expecting revenues of US$431.1m and US$0.72 per share in losses. So it seems there's been a definite increase in optimism about Redwire's future following the latest consensus numbers, with a very favorable reduction to the loss per share forecasts in particular.

See our latest analysis for Redwire

The consensus price target fell 8.5%, to US$23.60, suggesting that the analysts remain pessimistic on the company, despite the improved earnings and revenue outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Redwire analyst has a price target of US$28.00 per share, while the most pessimistic values it at US$19.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Redwire shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Redwire's rate of growth is expected to accelerate meaningfully, with the forecast 97% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 28% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.2% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Redwire to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Redwire analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Redwire (1 can't be ignored!) that you should be aware of.

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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.