Redwire Corporation: The Undervalued Cornerstone of America’s Space Infrastructure?

In Deloitte’s 2025 Aerospace and Defense Industry Outlook, the consulting firm noted that the positioning, navigation, and timing (PNT) subsector, out of the $613 billion global space economy, is projected to grow by 155% by 2035. In 2024, PNT accounted for nearly half of the commercial space market, at around $209 billion.

Although this growth is promising, the sector is hindered by challenges in finding and retaining the right human capital, as well as supply chain issues. Following President Trump’s tariff realignment, the aerospace and defense sector (A&D) is estimated to suffer 12%-18% cost increases and 30%-40% higher working capital requirements, with salaries typically being 56% above the national average.

Nonetheless, the ubiquitous integration of AI is projected to start offsetting these costs, as the Department of War holds $2.32 trillion in budgetary resources, making up 14.7% of the FY2025 federal budget.

For investors interested in A&D, particularly the promising PNT subsector, Redwire Corporation (NYSE: RDW) is emerging as a notable player.

Redwire’s Business Model

Based in Jacksonville, Florida, Redwire is adjacent to the aerospace industry. After all, Florida’s east coast, especially Cape Canaveral and Kennedy Space Center, offers ideal launch trajectories over the Atlantic Ocean. As such, Florida has established both defense and commercial clusters, as well as supply chain networks.

In this ecosystem, Redwire is manufacturing mission-critical space solutions for governments and commercial customers. These products range from very low earth orbit (VLEO) platforms, deployable structures such as Roll Out Solar Array (ROSA), in-space 3D manufacturing, sensors, radio-frequency systems, avionics, and unmanned aerial systems (UAS).

Much like other space companies, Redwire’s primary revenue source comes from government contracts, including NASA and the Department of War, as well as commercial partners like Honeywell, which are integrated into the same ecosystem. Including Jacksonville, the company employs 1,300 workers across 10 facilities in the U.S., as well as satellite operations in Kruibeke, Belgium.

Within the PNT sector, Redwire has been selected by both NASA and DARPA to develop navigation systems for Mars and the Moon. This includes AI-based guidance, navigation, and control (GN&C) systems to create robust solutions where a constant link to Earth is not possible.

Redwire is also developing machine vision for satellite surveillance and life extension, in collaboration with ExoAnalytic and Starfish Space. These innovations fall under Redwire’s Space Systems & Payloads division, which is responsible for approximately 70% of the company’s revenue, with the remainder coming from Engineering Solutions & Services.

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Redwire’s Financials and Acquisitions

In Q2 2025, Redwire reported a 20.9% year-over-year revenue decrease to $61.8 million, delivering $78.9 million higher net loss from the year-ago quarter. Much of this came from the Edge Autonomy acquisition, the company specialized in unmanned aerial vehicles (UAVs).

However, with this purchase, Redwire significantly expanded its portfolio and future DoW contracts potential, as Edge Autonomy covers both long-endurance fixed-wing and hybrid VTOL UAVs with its Stalker and Penguin UAS. Over the years, DoW has continued to ramp up UAV investments, going from $2.6 billion in FY2024 to around $9.4 billion for the projected FY2026 budget.

Already in late September, the newly acquired Edge Autonomy is to deliver Penguin UAS to the Ukrainian Armed Forces, aligning with President Trump’s renewed commitment to boost weapons sales via NATO allies.

Despite heavy expenditures in R&D and acquisition of Edge Autonomy, Redwire ended Q2 with record high cash reserves of $113.6 million ($35 million from credit facilities) compared to $55.8 million in the year-ago quarter. For the full year 2025, the company projects a revenue range of $385 million to $445 million, up from $304.1 million in 2024.

Ending June, Redwire had a contracted backlog of $329.48 million, up 11% from the year-ago quarter. Jonathan Baliff, Redwire’s CFO, noted that Edge Autonomy acquisition lowers the company’s estimate-at-completion (EAC) vulnerability, which happens when there are unexpected costs with complex space projects.

This quarter, Redwire’s EAC impact was $25.2 million. At the moment, the company has a negative earnings-per-share (EPS) of $3.25. However, the company has a year-over-year flat book-to-bill ratio of 1.47. In other words, Redwire has more value of orders received (bookings) compared to products shipped and billed (billings), indicating strong demand and future growth.

Previously, in September 2024, Redwire completed the acquisition of Hera Systems, which specializes in small satellite deployment for defense and security sectors, including on-orbit servicing for the U.S. Space Force.

The Bottom Line

While Redwire’s near-term profitability remains constrained by EAC overruns and acquisition costs, the company has a steadily expanding contract backlog for the renewed space frontier. At the same time, the integration of Edge Autonomy positions Redwire to capitalize on escalating Department of War spending and NATO-aligned procurement cycles.

In addition to this vital diversification, Redwire is advancing commercial microgravity infrastructure, as it is applied to bioprinting, advanced materials and new drugs. Considering the rarity of human capital and the organization needed to pull off all these projects, Redwire should be considered as even more critical than Intuitive Machines (LUNR) or Rocket Lab (RKLB).

In this light, investors willing to tolerate short-term volatility may find Redwire’s current valuation an asymmetric entry point into the backbone technologies of future military and commercial space operations.

At a current price of $10.67, aligning with the bottom forecast of $10 per share, RDW stock is particularly attractive given the average price target of $18.06 according to WSJ’s forecasting data. Redwire’s all-time high stock price peaked in February 2025 at $25.66, with the average 52-week price at $13.05 per share.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.