Is Redwire’s Latest Contract News Enough After a 35% Drop in 2025?

• Ever wondered if Redwire might be flying under the radar or if its current share price is shouting "bargain"? Let’s dig into what’s really behind the recent stock moves and what they might mean for value-minded investors.
• Redwire’s shares have seen a wild ride lately, dropping 7.0% over the past week and tumbling 34.9% in the last month. Keep in mind that over the past three years the stock is still up an eye-catching 220.2%.
• Recent headlines have focused on Redwire’s ambitious new contracts with major space industry players, propelling optimism about its growth prospects. At the same time, broader market volatility has dialed up both excitement and concern for investors trying to gauge just how much risk is priced in right now.
• With a valuation score of 2 out of 6, Redwire does not present as a classic deep value play. There is more to valuation than just a score. Next, we will walk through classic valuation models and then reveal a smarter way to assess what Redwire could really be worth.

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 true worth by projecting its future cash flows and discounting them back to today’s value. This process helps reveal what the company’s business could be worth on a fundamental basis, beyond any market excitement or pessimism.

For Redwire, the DCF model starts with a current Free Cash Flow (FCF) of -$154.07 million. While this number is negative today, projections point to significant improvement in the coming years, with FCF expected to reach $73.1 million by 2027. Looking even further out, analysts and model estimates suggest FCF could grow to over $200 million by 2035. All projections are calculated in US dollars.

The result of these cash flow projections is an estimated intrinsic value of $17.87 per share. Compared to the stock’s current price, this suggests Redwire is trading at a steep 59.2% discount. This indicates the market may be overlooking its long-term potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Redwire is undervalued by 59.2%. Track this in your watchlist or portfolio, or discover 836 more undervalued stocks based on cash flows.

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

Approach 2: Redwire Price vs Sales

The Price-to-Sales (P/S) ratio is a widely used valuation metric and is particularly helpful for evaluating companies like Redwire that are not yet consistently profitable. For growth-stage businesses, the P/S ratio allows investors to compare what the market is willing to pay for each dollar of revenue, regardless of current earnings. This metric is especially informative when profits are volatile or negative because it provides a clear sense of how the market values Redwire’s sales potential.

Redwire’s current P/S ratio stands at 4.6x. This is noticeably higher than both the Aerospace & Defense industry average of 3.2x and the peer group average of 1.8x. At first glance, this could suggest Redwire is trading at a premium relative to its competitors. Growth expectations, company size, and perceived risks all influence what a “normal” P/S ratio should be. Faster-growing or more innovative firms are often justified in carrying higher multiples.

Simply Wall St’s proprietary “Fair Ratio” calculates what would be a reasonable P/S multiple for Redwire by factoring in earnings growth expectations, profit margins, sector trends, company size, and key risks. It refines the comparison by incorporating more than just blanket industry averages or peer group metrics. For Redwire, the Fair Ratio is estimated at 2.4x. Since the current P/S ratio of 4.6x is significantly above this fair value benchmark, the stock appears to be overvalued according to this measure.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1406 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Redwire Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives, a smarter, more dynamic investment approach available on Simply Wall St’s Community page.

A Narrative is a tool that lets you create and share your unique story about a company by connecting its business developments, risks, and industry changes to your own forecasts for future revenue, earnings, and margins, resulting in a personalized fair value estimate.

With Narratives, investors move beyond static numbers. They link Redwire’s latest news or contracts to updated financial projections, forming a logical chain from “what’s happening in the business” to “what does this mean for value?”

Anyone can access Narratives, and millions of investors already use them to compare their fair value calculations with Redwire’s current share price and decide when to buy or sell.

Because Narratives update automatically when major news, earnings, or surprises hit the market, your viewpoint stays fresh and relevant, reducing the risk of outdated information coloring your decisions.

For example, one Redwire Narrative could be optimistic. Factoring in government funding and new in-space manufacturing contracts, the fair value could be as high as $28.00. Another might highlight contract risks and margin uncertainty, leading to a more cautious estimate of $10.00 per share.

Do you think there's more to the story for Redwire? Head over to our Community to see what others are saying!

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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