US$7.00: That's What Analysts Think Redwire Corporation (NYSE:RDW) Is Worth After Its Latest Results

Investors in Redwire Corporation (NYSE:RDW) had a good week, as its shares rose 5.0% to close at US$3.56 following the release of its quarterly results. The business exceeded expectations with revenue of US$60m coming in 3.2% ahead of forecasts. Statutory losses were US$0.16 a share, in line with what the analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Redwire

After the latest results, the two analysts covering Redwire are now predicting revenues of US$239.1m in 2023. If met, this would reflect a solid 15% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 31% to US$0.64. Before this earnings announcement, the analysts had been modelling revenues of US$235.9m and losses of US$0.64 per share in 2023.

The analysts trimmed their valuations, with the average price target falling 6.7% to US$7.00, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Redwire's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 31% growth on an annualised basis. This is compared to a historical growth rate of 46% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% annually. So it's pretty clear that, while Redwire's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Redwire. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Redwire 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.