MW Space stock Redwire soared this year and is set for more 'investor enthusiasm': analyst

By James Rogers

Redwire, which manufactures and supplies space equipment, has seen its shares skyrocket this year

Small-cap Redwire Corp., which manufactures and supplies space equipment, is poised to benefit from a healthy flow of new business, according to analyst firm Alliance Global Partners.

Shares of Redwire $(RDW.UK)$ are up 381.4% this year, outpacing space stocks AST SpaceMobile Inc. $(ASTS)$ and Rocket Lab USA Inc. $(RKLB)$, which are up 306.3% and 332.1%, respectively. Space-exploration company Intuitive Machines Inc. shares (LUNR) are up 464.2% in 2024.

"Like other industries, space-related stocks have rallied since [President-elect Donald] Trump won the election," Alliance Global Partners analyst Brian Kinstlinger wrote in a note released Monday. "While SpaceX, given Elon Musk's close relationship with President Trump will likely be a primary beneficiary, we expect there will be many other winners."

Related: Space stocks climb again as 'momentum sector' drives gains

"Growth in space-related budget for defense and for NASA was much stronger under President Trump," Kinstlinger added, referring to Trump's first term in office, from 2017 to 2021.

Set against this backdrop, Alliance Global Partners expects Redwire to continue its momentum and raised its price target for the company to $16 from $10. Redwire's proposal submissions during the first nine months of 2024 are already three times that of all 2023 at $2.9 billion, according to the analyst firm. "That increase in proposals does not yet reflect [Redwire's] positioning with its space platforms (buses) that are used for defense purposes and potential war fighting in space," wrote Kinstlinger. "Not only do we expect some large wins over the next nine months from the current bid submitted, we see a healthy flow of new procurements for [Redwire]."

Buses contain key infrastructure for operating hardware, such as satellites, in space.

Related: Rocket Lab's stock climbs after company completes two launches in less than 24 hours

"There are not a lot of small-cap space companies with revenue scale and finding those that are profitable is even more scarce," Kinstlinger added. "As a result, we argue investor enthusiasm will only strengthen over the next 12-18 months."

Redwire, which has a market cap of $876.34 million, was formed in 2020 following the acquisition of Deep Space Systems and Adcole Space by private equity firm AE Industrial Partners.

Of four analysts surveyed by FactSet, three have a buy rating and one has a hold rating for Redwire.

Related: Intuitive Machines' stock soars as company preps second moon mission for early 2025

Redwire shares are up 4.2% Monday.

-James Rogers

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November 25, 2024 15:29 ET (20:29 GMT)

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