Cantor Fitzgerald Starts Redwire (RDW) at Overweight, 'will continue to secure meaningful contracts'

Cantor Fitzgerald analyst Andres Sheppard initiates coverage on Redwire (NYSE: RDW) with a Overweight rating and a price target of $5.00.

The analyst comments "We initiate coverage of Redwire Corp. (RDW) with an Overweight rating and a 12-month $5 price target. Redwire Corporation manufactures and supplies foundational technology to build the Space infrastructure. We believe RDW benefits from a sizable order pipeline and contracted awards, diversification of products, customer types, and geography, plus the continued high growth of the Space Industry. A Sizable Pipeline, with Growing Contracted Awards and an Improving Book-to-Bill Ratio. Redwire’s products include power-generation systems, solar arrays, avionics, antennas, star trackers, sensoring, and cameras (among others). In 3Q23, RDW reported revenues of ~$65M and booked $46.5M in contracted awards. Contracted awards represent the estimated dollar value of firm-funded executed contracts for which work has not yet been performed, and since 2021, Redwire has been able to secure ~40% of the contracts it has bid for, which we see as encouraging. More importantly, the company’s contracted backlog has increased ~60% yoy, and as of 3Q23, the company has total contracted awards of $253.4 million, has submitted $714M in proposals through the first three quarters, and has a pipeline of ~$4.5B. In our view, this helps to validate the strong customer demand for Redwire’s products. Additionally, the company reported a 3Q23 book-to-bill ratio of 0.74x. The book-to-bill ratio is calculated as the value of contracts awarded divided by the revenue recorded for the period, with a book-to-bill ratio greater than one generally signalling growing demand for the industry. We believe the company’s LTM book-to-bill ratio trending upwards from 2021A to 2022A, from 1.13 to 2.04, portrays the increasing demand for the company’s space products. In our estimates, we model a book-to-bill ratio of 0.79 in 2024E. We believe that RDW will continue to secure meaningful contracts, and we model $54.7M of revenue in 4Q23 and $276.8M of revenue in 2024"

For an analyst ratings summary and ratings history on Redwire click here. For more ratings news on Redwire click here.

Shares of Redwire closed at $2.92 yesterday.

You May Also Be Interested In

• Intuitive Machines Inc. (LUNR) PT Lowered to $32 at Cantor Fitzgerald, Reaffirms Overweight Rating
• Powell Industries (POWL) PT Lowered to $235 at Cantor Fitzgerald
• Redwire and Kanematsu Announce Strategic Collaboration to Drive Innovation and Deliver Next-Generation Space Solutions for Japan’s Space Sector