Investment Thesis
Redwire exhibits fundamental profitability failure with a -78.9% net margin and -71.9% operating margin, alongside negative operating cash flow (-$6.7M), indicating the business model cannot sustain itself despite 10.3% revenue growth. While the balance sheet is fortress-like with minimal debt and adequate liquidity, the company is burning capital with no clear path to profitability, and losses must improve substantially before investment viability.
Strengths
- Strong balance sheet with minimal leverage (0.08x debt-to-equity) and $144.5M cash buffer providing operational runway
- Adequate liquidity ratios (1.75x current, 1.37x quick) indicating near-term solvency
- Revenue growth of 10.3% YoY and improving loss trajectory (net loss improved 16.8% year-over-year)
Risks
- Severe operating leverage problem: $69.7M operating loss on $97M revenue indicates broken unit economics and cost structure misalignment
- Negative free cash flow (-$11.4M) and operating cash flow (-$6.7M) unsustainable with finite $144.5M cash; current burn rate threatens balance sheet within 12-15 years
- Gross margin of 26.6% insufficient to cover operating expenses, signaling either pricing pressure, cost inflation, or revenue mix deterioration in aerospace/defense sector
Key Metrics to Watch
- Operating cash flow inflection point and timeline to positive FCF sustainability
- Operating margin improvement trajectory and break-even timeline
- Cash depletion rate and whether revenue growth reaches sufficient scale to achieve positive unit economics
Financial Metrics
Revenue
97.0M
Net Income
-76.5M
EPS (Diluted)
$-0.40
Free Cash Flow
-11.4M
Total Assets
1.5B
Cash
144.5M
Profitability Ratios
Gross Margin
26.6%
Operating Margin
-71.9%
Net Margin
-78.9%
ROE
-7.0%
ROA
-5.1%
FCF Margin
-11.8%
Balance Sheet & Liquidity
Current Ratio
1.75x
Quick Ratio
1.37x
Debt/Equity
0.08x
Debt/Assets
22.9%
Interest Coverage
-1.75x
Long-term Debt
88.2M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T12:06:44.963011 |
Data as of: 2026-03-31 |
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