SpaceX peer Redwire up 16% on new military contracts, ESA lunar robotics progress

Shares of Redwire, a small-cap developer of spacecraft and infrastructure solutions for Mars, surged 16% in premarket trading on Tuesday, extending a rally that began last week. The company announced a contract with the European Space Agency to develop a prototype robotic arm for a lunar lander. Over the last month alone, Redwire shares have gained 87%.

Redwire shares rose more than 16% in the first minutes of premarket trading on Tuesday to $20.30 per share. The rally extended gains that began on Friday (U.S. markets were closed Monday for the Memorial Day holiday). On that day, the company’s shares jumped nearly 14% to $17.50 per share.

Markets were reacting to Redwire’s announcement that it had secured a contract with the European Space Agency to develop the MANUS robotic arm prototype for a lunar lander designed to unload cargo on the Moon. Development of the system will take 18 months and will give the company an opportunity to compete for a follow-on contract with the European Space Agency, according to the press release.

Over the last month, Redwire shares have surged nearly 90%. The company’s stock is close to posting the best monthly performance in its history, Stocktwits wrote.

The rally has been fueled by a series of announcements from the spacecraft manufacturer, GuruFocus explained. Earlier in May, the company reported a 58% year-over-year increase in first-quarter revenue to $97 million and a record contract order book of $498.1 million.

Later, on May 19, Redwire announced a multiyear contract valued in the high eight figures with an undisclosed NATO ally for deliveries of its Penguin Mk3 drone system. The following day, it disclosed a follow-on order for Stalker drones from the U.S. Army.

Interest in Redwire shares has also been boosted by the expected IPO of Elon Musk’s SpaceX, Stocktwits added. Investors are increasingly focusing on infrastructure companies that could benefit from broader investment in the aerospace sector, according to the report: Redwire manufactures solar arrays already used in NASA projects.

Oninvest analyst Aldiyar Anuarbekov has included Redwire in his list of the top five small caps ahead of the SpaceX IPO.

Redwire is a relatively young company. It was founded in 2020 through the combination of several existing businesses with the goal of developing solutions and infrastructure for the next-generation space economy.

Today, Redwire manufactures spacecraft, avionics, and a range of sensors that can be used both in low Earth orbit and in deep-space missions.

The company participates in NASA’s Artemis lunar exploration program and is developing technologies to build infrastructure, including habitat foundations, on the Moon and Mars.

Another area of focus is medicine and manufacturing in microgravity. Using its 3D-printing system aboard the International Space Station, the company printed a meniscus and the first sample of human heart tissue. It is also developing and testing medicines in space: in cooperation with pharmaceutical giant Eli Lilly, the company found that insulin crystals grown in microgravity exhibited superior properties versus those produced on Earth.

Eight Wall Street analysts rate Redwire shares a “buy,” one has a “hold” rating, and one recommends “sell.” As the stock has rallied this year, several analysts have raised their target prices. Still, the consensus of $14.40 per share remains almost 18% below Redwire’s closing price on Friday.