TLDR
- Redwire stock jumped 14.9% on Thursday after Jefferies Financial Group upgraded it to a hold rating
- The stock hit a high of $17.28 with volume more than double the daily average, at around 66.8 million
- The rally is partly driven by sector-wide SpaceX IPO enthusiasm pulling investors into public space stocks
- A newly awarded commercial space greenhouse contract added to the positive momentum
- Dilution risk remains a concern after Redwire expanded its at-the-market equity program to $500 million
Redwire (RDW) stock rose 14.9% on Thursday, trading as high as $17.28 before settling around $17.08, up from a prior close of $14.87.
The move came after Jefferies Financial Group upgraded the stock to a hold rating. Volume on the day hit roughly 66.8 million, more than double the average daily volume of around 31.7 million.
Redwire isn’t the only space stock catching bids right now. The broader sector is seeing a lift from anticipation around a potential SpaceX IPO, with investors hunting for public names that could benefit from the hype.
On top of the upgrade, Redwire also received a boost from news of a newly awarded contract for a commercial space greenhouse mission. That added a fresh fundamental reason for buyers to step in.
Still, the backdrop isn’t entirely clean. The company recently expanded its at-the-market equity program to $500 million, raising dilution concerns that had weighed on the stock in prior sessions.
Analyst Ratings Stay Mixed
Analyst sentiment is uneven. Truist Financial upgraded Redwire to strong-buy back in May, and Canaccord Genuity raised its price target from $12 to $14 with a buy rating. Alliance Global Partners also holds a buy.
On the other side, Weiss Ratings maintained a sell rating in April. Zacks upgraded from strong sell to hold in March, which isn’t exactly a ringing endorsement.
The consensus sits at Moderate Buy, with an average price target of $15.44 — below where the stock is now trading after Thursday’s move.
Earnings Miss Adds Caution
Redwire reported Q1 results on May 6th that came in below expectations. The company posted a loss of $0.40 per share, well below the consensus estimate of a $0.16 loss.
Revenue came in at $96.97 million, missing the $105.94 million estimate. That said, revenue was still up 57.9% year-over-year, so the top line is growing fast even if the bottom line is struggling.
Analysts are currently forecasting a full-year loss of $0.76 per share.
On the institutional side, Bank of America increased its stake by over 7,500% in Q1, picking up more than 6.7 million additional units. State Street lifted its position by 61.1% in Q4, and UBS raised its stake by 140.8%.
Insiders, however, have been selling. Over the past three months, insiders offloaded around 23.3 million units worth roughly $228.8 million.
The stock carries a beta of 2.92, meaning it moves sharply in both directions. Its year-to-date gain now stands at around 95%.
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