Yahoo Finance When Can We Expect A Profit From Redwire Corporation (NYSE:RDW)?
With the business potentially at an important milestone, we thought we'd take a closer look at Redwire Corporation's (NYSE:RDW) future prospects. Redwire Corporation, a space infrastructure company, develops, manufactures, and sells mission critical space solutions and components for national security, civil, and commercial markets in the United States and internationally. With the latest financial year loss of US$16m and a trailing-twelve-month loss of US$34m, the US$776m market-cap company amplified its loss by moving further away from its breakeven target. Many investors are wondering about the rate at which Redwire will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Check out our latest analysis for Redwire
Redwire is bordering on breakeven, according to some American Aerospace & Defense analysts. They expect the company to post a final loss in 2022, before turning a profit of US$23m in 2023. So, the company is predicted to breakeven approximately 2 years from now. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 72% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Redwire given that this is a high-level summary, however, take into account that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we would like to bring into light with Redwire is its debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, which in this case, the company has significantly overshot. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
This article is not intended to be a comprehensive analysis on Redwire, so if you are interested in understanding the company at a deeper level, take a look at Redwire's company page on Simply Wall St. We've also put together a list of important factors you should look at:
Valuation: What is Redwire worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Redwire is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Redwire’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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