February 26, 2026 5:56 pm
Redwire (NYSE:RDW) reported Q4 2025 EPS of -$0.58, missing analyst estimates by $0.40, while revenue hit $108.79M, beating forecasts by $10M. The stock is up 56.4% over three months but remains down 40.6% year-on-year—a volatile ride signaling both risk and potential for turnaround hunters.
Missed Profits, Beat Sales
- Earnings miss: RDW posted a Q4 loss of $0.58 per share versus the expected -$0.18—a notable shortfall. However, the company delivered a 10% revenue beat ($108.79M actual vs. $98.77M expected). This mix of top-line strength and bottom-line weakness highlights operational growing pains amid sector expansion.
- Volatility and expectations: In the past year, the stock has swung from a high of $22.25 to a low of $4.87. Despite the rally in recent months, RDW’s financial health is flagged as weak, with a net margin of -37.6% and ongoing negative free cash flow
What’s Behind the Numbers?
- Growth engines: Revenue jumped 41.9% year-on-year in Q4, thanks to contract wins and the Edge Autonomy acquisition. RDW is targeting defense megaprojects like the Golden Dome (potential $542B lifetime value) and scored a $44M DARPA contract, signaling runway for future sales.
- Profitability gap: Gross profit margin is razor-thin at 3.04%, weighing on earnings. Levered free cash flow margin is -7.8%, and the forward P/E is negative, underscoring the company is still in “investment mode.”
- Balance sheet stress: Current ratio at 0.8x signals tight liquidity, while debt/equity is a quirky -76.8% (reflecting accounting quirks and acquisition effects)
Analyst Perspective
- Consensus: analysts rate RDW a Buy, with a mean target of $13.11—a theoretical 52% upside from Tuesday’s close ($8.62), though the current fair value calculation suggests only ~ 5% further upside.
- Risks: The stock price tends to be volatile and is prone to weak gross profit margins.
Why This Matters
RDW is a classic high-risk, high-reward space-tech story. Despite big revenue wins, persistent losses and razor-thin margins make it a battleground. If management executes on integration and defense contracts, upside could be considerable—but the company must prove it can turn sales into profits. The next few quarters will reveal if RDW’s moonshot ambitions can overcome gravity.