Redwire Corporation (RDW +0.21%) stock, the space infrastructure company that turned itself into a military drones stock last year, soared 7% through noon ET Monday.
You can thank Truist Securities for that.
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Truist hearts Redwire
Truist analyst Michael Ciamoli upgraded Redwire stock to "buy" with a $15 price target this morning, predicting the stock has "66% upside" from today's prices. And why?
According to Ciamoli, roughly one-third of Redwire's programs are ramping up and now producing at full speed. The company's other programs are making progress as well, helping to grow Redwire's gross profit margins and potentially implying lower research and development costs in the near future.
Indeed, Ciamoli thinks we may see gross margins surge from 9.2% (according to data from S&P Global Market Intelligence) in 2025 to 23.3% in 2026!
NYSE: RDW
Key Data Points
Could Redwire turn profitable in 2026?
Now don't get too excited. Operating costs consumed 57% of Redwire's revenue in 2025. They were 25.5% of revenue in 2024. Pick either number as a baseline, and even a 23.3% gross profit margin won't be enough to turn Redwire stock profitable after its operating costs are subtracted. Indeed, according to analysts polled by S&P Global, Redwire's still at least a couple years away from GAAP profitability.
The good news is that 2027 might be the first year Redwire hits positive free cash flow, finally giving investors something more substantial than mere revenue and revenue growth on which to value Redwire stock.
At 3 times sales, the stock was already starting to look attractive. With the catalyst of positive free cash flow now on the horizon, it may be time to buy Redwire stock.
