What comes next for this space and defense company?
What comes next for this space and defense company?
Like many stocks that went public by merging with a special purpose acquisition company, Redwire Corporation (RDW -1.89%) hasn't been a particularly fun ride for early investors. Shares are down roughly 21% over the last five years after brief spikes of optimism eventually faded.
That said, past performance doesn't equal future performance. And Redwire's relatively small size could make it a compelling alternative to larger space and defense-related companies. Let's dig deeper to see if a $5,000 investment made right now has millionaire-maker potential.
$8.30-$0.16 (-1.89%)
NYSE · As of 4:00 PM ET 10/20/26
In 2020, the private equity firm AE Industrial Partners combined two of its holdings (Adcole Space and Deep Space Systems) to create a new entity called Redwire to focus on the burgeoning space industry. Redwire was able to hit the ground running because of its strong relationship with government clients like NASA, to which it supplies power systems, optics, and other types of advanced hardware.
Redwire's technology has featured in high-profile missions; the company supplied solar arrays to the International Space Station and imaging and navigation systems to Artemis 2, which recently made a crewed flyby of the moon.
Redwire's work with NASA speaks to the quality of its hardware, which represents an economic moat. And over the long haul, investors should expect these missions to be a consistent source of revenue -- especially as the U.S. government shows a growing willingness to contract low-orbit-related space work to the private sector.
Redwire's second-quarter earnings demonstrate impressive business momentum. Revenue jumped roughly 89% year over year to a record of $117.1 million, and huge demand has led to a backlog worth $542.1 million. Perhaps surprisingly, however, very little of this expansion is coming from the company's legacy space industrial business. Instead, Redwire is quickly becoming a next-generation defense contractor.
The wars in Ukraine and the Middle East have exposed the limitations of traditional military platforms like aircraft carriers, ballistic missiles, and interceptors -- the last of which often cost far more than the projectiles they are being used to destroy.
Averytin News Financial update.