Yahoo Finance Redwire Corporation (NYSE:RDW) Just Reported, And Analysts Assigned A US$7.00 Price Target
Last week, you might have seen that Redwire Corporation (NYSE:RDW) released its quarterly result to the market. The early response was not positive, with shares down 4.0% to US$3.39 in the past week. The business exceeded expectations with revenue of US$60m coming in 3.2% ahead of forecasts. Statutory losses were US$0.16 a share, in line with what the analysts predicted. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
View our latest analysis for Redwire
Taking into account the latest results, the consensus forecast from Redwire's dual analysts is for revenues of US$239.1m in 2023. This reflects a notable 15% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 32% to US$0.64. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$235.9m and losses of US$0.64 per share in 2023.
The analysts trimmed their valuations, with the average price target falling 6.7% to US$7.00, with the ongoing losses seemingly weighing on sentiment, despite no real changes to the earnings forecasts.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Redwire's revenue growth is expected to slow, with the forecast 31% annualised growth rate until the end of 2023 being well below the historical 46% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% per year. So it's pretty clear that, while Redwire's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Redwire. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
You still need to take note of risks, for example - Redwire has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.
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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.
