Redwire Corporation (RDW +14.88%) stock finished Friday up 14.9% while the S&P 500 and the Nasdaq Composite rose 0.6% and 1.2%, respectively.
Shares of the space hardware and defense drone builder rose for the second day following the release of its second-quarter report, which came in well ahead of expectations.
NYSE: RDW
Key Data Points
Record revenue and a SpaceX partnership fuel the rally
Redwire reported its Q2 results after the closing bell on Wednesday. Revenue hit a record $117.1 million, up nearly 90% from a year ago. Wall Street was expecting $9 million less.
Adjusted loss per share was a better-than-expected $0.09, and gross margin jumped to 27.8% from negative 30.9% a year earlier. Contracted backlog -- signed work the company hasn't delivered yet -- reached a record $542.1 million, though Redwire left its full-year revenue guidance of $450 million to $500 million unchanged.
Image source: Getty Images.
Then yesterday, the company said it had agreed to buy the entire capacity of a SpaceX Starfall spacecraft for a mission planned in 2028. It will carry up to 32 of the company's PIL-BOX units -- small containers that run pharmaceutical experiments in microgravity.
Why Redwire is still a high-risk bet
Redwire is certainly heading in the right direction, but it still loses money on a consolidated basis. Adjusted EBITDA was negative $3.2 million last quarter, and free cash flow (FCF) was negative $35.3 million.
This is still a high-risk stock, though potentially high-reward.
