Our Stock of the Week is Redwire Corporation (RDW). RDW describes itself as “a global space infrastructure and innovation company enabling civil, commercial, and national security programs. Redwire’s proven and reliable capabilities include avionics, sensors, power solutions, critical structures, mechanisms, radio frequency systems, platforms, missions, and microgravity payloads.”

The company is involved in a wide variety of space-related technology. One example is that it has successfully shown that small-molecule drug crystals can be grown in orbit using its proprietary system. These are larger and more structured than crystals grown on Earth. The space-grown crystals can be used as templates or seeds to grow similar crystals on Earth. These crystals are used in medicine and materials science.

Redwire has been growing through acquisition. Its tenth acquisition with  Hera Systems, which has “expertise in specialized missions for national security space customers and unique technical achievements with a path to transformative capabilities in the emerging area of dynamic space operations.”

On January 20, RDW announced its largest acquisition to date of Edge Autonomy. Edge designs and manufactures uncrewed technology systems used for long-range reconnaissance, intelligence gathering, and aerial surveillance.

This deal nearly doubles the market cap of RDW and expands its space offering to national defense. It opens up the potential for dramatic growth at exactly the time when demand for their services is expanding.

The company is not profitable at this point, but Redwire, as a combined company with Edge, is forecasting full-year revenues of $535 million – $605 million and adjusted EBITDA of $70 million – $105 million with positive free cash flow, assuming the transaction had been consummated on January 1, 2025.

Technically, the stock had a very strong run in 2024 and pulled back to its 50-day simple moving average last week. It is gapping up on the Edge acquisition deal, but I’m expecting an opportunity for entries on pullbacks.

The company is in the right sector at the right time and is making aggressive moves to expand its offerings to both space and national security.

As always, we would not chase the stock to start the week but will look for opportunities to buy as the chart develops.

This post is for educational purposes only! This is not advice or a recommendation. We do not give investment advice. Do not act on this post. Do not buy, sell, or trade the stocks mentioned herein. We WILL actively trade this stock differently than discussed herein. We will sell into strength and buy or sell anytime for any reason. We will actively trade into any unusual activity. At the time of this post, principals, employees, and affiliates of Shark Investing, Inc. and/or principals, clients, employees, and affiliates of Hammerhead Financial Strategies, LLC, directly or indirectly, controlled investment and/or trading accounts containing positions in RDW. To accommodate the objectives of these investing and/or trading accounts, the trading in these shares will be contrary to and/or inconsistent with the information contained in this posting.