Redwire Is A Sell Following The Edge Autonomy Deal (Rating Downgrade)

2025-01-22 03:40:26 ET

Summary

• Redwire stock has surged more than 400% over the past year. It's now run too far and too fast.
• While the company has generated significant revenue growth, profitability remains a challenge.
• The Edge Autonomy merger will likely improve the company's profitability but seemingly dilutes the business' core focus on space operations.
• Redwire's balance sheet is not in great shape, and this merger may increase funding needs.

Redwire ( RDW ) has been a tremendous small-cap growth story.

Shares of the space-focused industrial company have risen more than 400% over the past 12 months. RDW stock has fully recovered from its slow start following its SPAC transaction, with shares powering into the double-digits in recent months, and trading up to $19 on Tuesday morning:

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