DISCLAIMER: This is a quantitative framework for educational purposes only. It is not financial advice. Always do your own research and consult a licensed financial advisor before making investment decisions.
⚠ ANALYST NOTE — Governance & dilution risk (not an automatic Do-Not-Buy, but caps conviction): A 12 Jun short report (Fugazi Research) labelled Redwire a “rollup machine with governance dysfunction,” citing active securities litigation, a ~$350M+ ATM facility, and insider selling. Sponsor AE Industrial Partners (≈60% owner) has sold >$229M; CEO Cannito made a small (~$200k) open-market buy. Share count went from ~71M to ~199M in a year (Edge Autonomy stock deal + ATM). Size any position as speculative.
Horizon
Signal
Primary Score
Confidence
Key Driver
Short-term (1–3 mo)
HOLD
52
55%
Higher-TF uptrend but violent −48% pullback; high beta; near support
Medium-term (6–12 mo)
HOLD
51
50%
+58% revenue growth & NATO/defense tailwind vs deep losses + dilution gates
Long-term (3–5 yr)
HOLD
54
50%
Real space/defense secular driver, but no profit path to 2028 + dilution caps it
Signal capped at HOLD by the Dilution/SBC gate and the cash-burn/coverage gate — the strong driver tailwind (74) cannot amplify a HOLD. Next update: 2026-07-02 — default +14d (next earnings ~early Aug, beyond window).
Five independent 0–100 scores with confidence. The per-horizon base BUY/HOLD/SELL comes from the three fundamental pillars (Quality / Valuation / Timing) via the Decision Matrix; the two context pillars (Underlying Drivers, Economic Alignment) then amplify a BUY to STRONG BUY or a SELL to STRONG SELL when both corroborate. Here both context pillars are tailwinds — but the base is HOLD, which never amplifies.
Business Quality
50
High growth, but pre-profit & diluting
Conf 55%
Valuation
52
Fair — pre-profit; ~+26% to consensus
Conf 50%
Entry/Exit Timing
52
Higher-TF uptrend, sharp pullback
Conf 55%
Underlying Drivers
74
Strong tailwind — defense/NATO/space
Conf 60%
Economic Alignment
78
Trend-Following · Tailwind (Defense O/O/SO)
Conf 65%
Read: A textbook conflicted name. The context pillars are strongly positive — the defense/NATO/space driver (74) and a Defense-sector economic tailwind (O/O/SO) — but the fundamental pillars are only middling (Quality 50, Valuation 52, Timing 52), which maps to a base HOLD, and two hard gates (dilution, cash-burn) independently cap it at HOLD. The bull case (revenue +58%, NATO UAS backlog) is real; the framework simply won’t issue a BUY on a deeply loss-making, heavily-diluting, litigation-flagged balance sheet until execution and dilution improve.
2
Hard Gates & Do-Not-Buy Status
Binary safety checks. Any TRIGGERED gate caps the signal regardless of the scores above; caution flags inform sizing. Two gates fire here and cap the signal at HOLD.
❌
Gate 4 — Dilution / Accounting Shares ~71M→~199M in a year (Edge Autonomy stock deal + ATM); $42.5M accelerated SBC in Q1. Caps at HOLD.
❌
Gate 1 — Financial Distress Negative FCF 4+ quarters, interest coverage <1.5x (EBIT negative), no profit path to 2028. Low debt offsets, but caps at HOLD.
⚠
Governance / litigation Short report + active securities litigation + sponsor (AEI) selling. Caution — sizing risk, not an auto-DNB.
✅
Gate 2 — Earnings event No earnings within 14 days (Q2 ~early Aug). Clear.
✅
Gate 3 — Valuation ceiling Price $13.94 below low analyst target ($14); not above the highest target. Clear.
Do-Not-Buy triggers: none fire as hard prohibitions. The sponsor selling is a PE distribution (not C-suite dumping — the CEO actually bought), so DNB Trigger 4 is treated as a governance caution, not an automatic Do-Not-Buy. Net effect: signal capped at HOLD by Gates 1 & 4.
3
Pillar Detail: Business Quality
Why Quality scored 50: strong, partly-acquired revenue growth and an improving gross margin against deep losses, negative FCF, low ROIC, modest moat and serious dilution. Metrics use the Industrials/Aerospace high-growth lens.
Business Quality — Pillar Score
Medium. A genuine top-line growth story (+58% YoY) and a real defense pivot, undercut by deep losses, thin/volatile gross margin, negative ROIC and heavy share issuance.
50
Confidence 55% · pre-profit, harder to evaluate
Sub-signal
Value
Sector/Context
Score
Rationale
Revenue trajectory
+58% YoY (Q1'26 $97.0M)
Top-quartile growth
70
Strong, but largely Edge Autonomy acquisition-driven; organic growth thinner.
Negative FCF; reliant on ATM/financing. $175M liquidity provides ~1.5–2yr runway.
Balance sheet
D/E 0.19; current 1.75; liq $175M
Low debt, pref overhang
52
Low debt is a genuine positive; offset by $136.7M pref liquidation pref + dilution.
ROIC / capital allocation
ROIC negative; FMP ROE/ROA 1/5
Value not yet created
38
Aggressive M&A rollup funded by equity; capital discipline unproven (see Analyst Note).
Industry benchmark (Industrials — ROIC vs WACC + backlog): ROIC is below WACC (negative), which fails the value-creation half; but backlog is growing (NATO UAS deal May 2026, defense expansion). Benchmark score ~45 — demand visibility is the bright spot, profitability the problem.
Pricing Power
45
Mission-critical parts; thin margins
Network Effects
40
Minimal
Switching Costs
58
Qualified flight components hard to re-qualify
Cost Advantage
35
Sub-scale; no cost edge
Intangibles
55
IP, clearances, gov relationships
Moat average ≈ 47 — a niche, clearance-gated position in space infrastructure + UAS, but not yet a durable economic moat at this scale.
4
Pillar Detail: Valuation Attractiveness
Why Valuation scored 52: a pre-profit name where trailing multiples are meaningless, so the weight shifts to EV/Revenue vs growth, the analyst-target cross-check, and the post-crash de-rate. Cheap relative to analyst targets, rich on fundamentals.
Valuation Attractiveness — Pillar Score
Fair. EV/Revenue ~5.8x is rich for a thin-margin, loss-making business — but the stock sits at/below the low analyst target after a ~48% crash, and consensus implies +26%.
52
Confidence 50% · no meaningful earnings
Lens
Value
Read
EV / Revenue (TTM)
~5.8x (EV $2.16B / rev ~$371M)
Rich for ~9–27% gross margin hardware, but typical of “space” multiples
P/Sales
5.6x
Above market; growth-dependent
FCF yield
Negative (N/A)
Not cash-generative — valuation rests on future expectations
Reverse-DCF / implied growth
Market prices years of growth + eventual profit
Analysts see losses through 2028 — market is more optimistic than the model
Analyst targets
Cons $17.60 (+26%), median $15 (+8%), high $24, low $14
Price ($13.94) at/below the low target — supportive floor
Grades consensus
Buy 8 / Hold 1 / Sell 1 (80% bullish)
Bullish, but Jefferies downgraded Buy→Hold (1 Jun)
FMP rating
C (2/5)
Poor profitability sub-scores drag it
Embedded optionality / free upside: (1) the Edge Autonomy UAS/defense arm — drones & autonomous systems with a fresh NATO deal — is a higher-growth segment the consolidated loss-making multiple under-credits; (2) OSAM / in-space manufacturing & digital-engineering SaaS are early-stage call options priced near zero; (3) defense-budget / NATO 5%-of-GDP backlog conversion. Real but unquantified — a reason to watch, not a reason the loss-making core is cheap. Net: the core justifies roughly the current ~$14; the defense/space optionality is the free call, paid for with dilution risk.
5
Pillar Detail: Underlying Drivers
The dominant external force: government/defense budgets, NATO rearmament, and space procurement. A context pillar — it does not change the base signal, but a tailwind ≥65 could amplify a BUY (not a HOLD).
Primary Driver — Defense budget / NATO rearmament / space procurement
74
Horizon
Assessment
Historical (25%)
Rising US/allied defense budgets, NASA outsourcing, and a structural space build-out drove RDW revenue +58% YoY and the stock +99% YTD.
Current (50%)
NATO 5%-of-GDP rearmament + Edge Autonomy UAS (new NATO deal, May 2026) are direct tailwinds; the macro Defense sector (XAR) is rated O/O/SO. Strongly favourable.
Forward (25%)
Multi-year procurement + space-infrastructure demand remain supportive; risk is budget timing and program execution.
Driver score 74 = Strong Tailwind → eligible to amplify a base BUY to STRONG BUY. But the base signal is HOLD, and HOLD never amplifies, so the driver does not change the signal — it is the reason the name is worth tracking for a future entry. Thesis-invalidation floor: a sustained defense-budget freeze or loss of major programs.
6
Pillar Detail: Economic Alignment
How the current economy sits relative to RDW, read from the MacroEconomic report dated 2026-06-17. Classifies the macro pressure (Tailwind/Neutral/Headwind) and frames a long entry as Trend-Following or Contrarian. A context pillar feeding amplification via its pressure.
Stance: Trend-Following · Pressure: Tailwind
78
Source: sector map (RDW is not a watchlist name) → the macro report’s Driver-Sector matrix rates Defense (XAR) O/O/SO and Industrials (XLI) O/O/SO — both strong tailwinds across all horizons, driven by NATO rearmament + reshoring. The Soft-Landing/risk-on regime (VIX ~16, oil relief) is additionally supportive of high-beta growth names. Going long RDW rides the economic trend (Trend-Following), conviction 78. Macro report date: 2026-06-17 (1 day old — fresh).
Amplification: the pressure is a Tailwind, which would help amplify a base BUY to STRONG BUY alongside the driver — but the base signal is HOLD, so it leaves the signal unchanged.
7
Pillar Detail: Entry/Exit Timing
Why Timing scored 52: higher-timeframe uptrend intact but a violent ~48% two-week pullback, extreme volatility (β 2.94, ATR ~16% of price), mixed sentiment (a short report + a downgrade vs a sector ‘thaw’), and price sitting just above daily support.
Entry/Exit Timing — Pillar Score
Neutral. Monthly/weekly/daily uptrends survive the crash, but intraday momentum is down, volatility is extreme, and the name is digesting the SpaceX-IPO capital rotation.
52
Confidence 55% · high beta / recent volatility
Sub-signal
Reading
MTF confluence
Bullish higher-TF (monthly/weekly/daily uptrend; price > SMA50 $13.67 & SMA200 $9.84) with a short-term (hourly/15m) downtrend — a pullback in an uptrend.
Relative strength
+99% YTD (huge 3–6mo outperformance) but sharp 2-week underperformance in the crash. Mixed.
Near daily support ~$12.86–$13; next support ~$8.30; SMA200 $9.84.
Macro overlay
Defense sector in favour; VIX ~16 (risk-on); Fed on hold. Favourable.
Sentiment
Jefferies downgrade (1 Jun) + Fugazi short report (12 Jun) vs space-sector “thaw” (17 Jun). Net cautious near-term.
Catalysts
No earnings within 14 days (Q2 ~early Aug). SpaceX-IPO overhang fading. Calm window.
8
Economic Event Risk
High-impact macro releases over the next ~2 weeks and recent surprises. RDW has low direct macro sensitivity (its driver is the defense budget, not rates), but as a high-beta growth name it is sensitive to the risk-on/risk-off regime.
Date
Event
Impact
Relevant?
Why
2026-06-25
US Core PCE (May)
High
⚠ Medium
The macro report’s falsification test for the Soft-Landing/risk-on regime — a hot print (≥0.4%) would pressure high-beta growth names like RDW.
~early Aug
RDW Q2 2026 earnings
High (company)
✅ Yes
Binary for the thesis: organic growth, gross-margin trend, cash burn & dilution pace. Drives the next-update schedule.
Recent macro tape (last week): the Iran/Hormuz ceasefire + oil −25% and a Fed hold pushed the regime risk-on (VIX ~16) — a tailwind for high-beta names that has helped the space-sector “thaw.” No high-impact, RDW-specific economic release inside 3 days.
9
Multi-Timeframe Technical Analysis
Trend, RSI and breakout status across five timeframes plus a confluence verdict. The pattern is a classic higher-timeframe uptrend digesting a sharp short-term pullback.
Timeframe
Trend
RSI
MACD
Key S/R
Breakout
Vol
Monthly
Uptrend ↑
54
+, rising
S $6.61 · R $14.55/$22.25
Resist. breakout
2.7x
Weekly
Uptrend ↑
53
+, rising
S $7.43 · R $14.55/$26.64
Resist. breakout
0.9x
Daily
Strong Up ↑
45
−, falling
S $12.86 · R $15.82/$22.75
(pulled back)
0.6x
Hourly
Strong Down ↓
40
−
S $13.18 · R $14.98
Support breakdown
2.2x
15-min
Downtrend ↓
35
−
S $13.26 · R $14.71
Support breakdown
0.6x
Confluence
Bullish (higher timeframes) — short-term pullback within a larger uptrend. Watch daily support ~$12.86 as the buy-the-dip zone; loss of SMA200 ($9.84) would break the structure.
10
Price Chart (6-Month Daily)
A 6-month daily close line with SMA50 overlaid — the visual companion to the MTF table: the parabolic May run to $26.64, the ~48% June crash, and the pullback toward the rising SMA50.
11
Scenario Summary
Bull, Base and Bear 12-month paths with triggers and probabilities. The base case dominates: continued growth but persistent losses keep the stock range-bound around analyst targets.
Bull · 25% · $24+
NATO/defense backlog converts, organic growth + gross-margin inflection, dilution slows; market re-rates the Edge Autonomy/defense optionality. Path to the $24 high target.
Base · 50% · $15–18
Revenue keeps growing but losses persist through 2027–28; ATM dilution caps upside. Range-bound around consensus ($17.6) / median ($15).
Bear · 25% · $9–11
Cash burn + heavy ATM dilution, the short thesis/litigation gains traction, space-sector sentiment sours. Retest of SMA200 (~$9.84) / $8.30 support.
Probability-weighted central tendency ≈ $15–16, roughly in line with the median analyst target and the fair-value anchor — consistent with a HOLD.
12
Entry / Exit Rules
Mechanical conditions to act on. Entries require multiple independent checks; exits are governed by a hard stop, thesis invalidation and a profit-take. At $13.94 only the price-vs-fair-value check is met — and the gates cap conviction.
Entry Rules
Rule 1 (Fundamental): Accumulate (speculative) if price < $15 fair value AND no earnings within 7d AND driver ≥50. Currently MET ($13.94, driver 74) — but gated to a speculative add, not a BUY.
Rule 2 (Technical): Add if 1-day close above SMA20 (~$18.40) on volume >1.5x AND RSI 35–65 AND MACD histogram positive 2+ days. NOT MET (price below SMA20; daily MACD negative).
Rule 3 (Catalyst): Add if post-Q2-earnings move >+5% AND guidance raised AND volume >2x. PENDING (Q2 ~early Aug).
Exit Rules
Stop-loss: close below $11.50 for 2 consecutive days (below $12.30/$12.86 support). Not triggered.
Thesis invalidation: guidance cut AND organic growth decelerates below sector AND a new gate fires. Not triggered (growth strong; gates already known).
Profit target: trim into $17.60 (consensus) then $24 (high) with RSI >70. Not reached.
Imagine you act at the current price $13.94 · as of 18 Jun 2026
What if you bought now?
You’re risking ~$2.44/sh (−18%) to the $11.50 stop to gain ~$3.66 (+26%) to consensus.
Risking: the bear path to ~$9–11 (−21% to −34%); buying into a short-term downtrend (below SMA20); β 2.94 means ~16%/day swings; dilution/litigation overhang.
Gaining: immediate exposure to the base/bull upside (+8% to median, +26% to consensus, +72% to the $24 high) and the defense/NATO optionality — at/below the low analyst target after a 48% de-rate.
Read: only a speculative, small starter is justified now; waiting for either the ~$12.86 support hold or a reclaim of SMA20 on volume materially improves the entry.
What if you sold now?
You’d protect against a ~$3–5 bear drawdown but give up ~$1–4 of base/bull upside.
Protecting: capital if the burn/dilution/short thesis plays out (retest of $9–11); you sidestep the extreme volatility.
Giving up: the +26% to consensus and the defense backlog optionality; you’d be selling at/below the low analyst target.
Read: no exit rule is triggered at $13.94 — this is a hold/speculative-accumulate zone, not a mechanical sell.
13
Position Sizing Context
No risk budget or portfolio role was specified, so position sizing is not computed. The volatility context below is provided for risk awareness.
Position sizing not computed — specify your portfolio allocation and role for sizing guidance. Volatility context: β ≈ 2.94 (≈3× the market); daily ATR ~$2.26 (~16% of price); the stock fell ~48% from its 52-week high in ~2 weeks. Any position behaves like ~3× its nominal size in risk terms — treat strictly as a small, speculative satellite.
14
Calibration Snapshot
Machine-readable snapshot of every score, key level and override, saved alongside this report as calibration-RDW-20260618-0905.json for next-run deltas and the watchlist monitor.
⚠ get_earnings_calendar — returned empty; next earnings (~early Aug) inferred from the quarterly cadence (Q1 reported 7 May).
✓ Web search — Edge Autonomy $925M acquisition, $175M liquidity, ATM/dilution, AEI ~60% ownership, Fugazi short report, CEO buy — corroborated via SEC filings / SpaceNews / IR.
Confidence impact: Overall confidence 50% (min of the three fundamental pillars). Pre-profit status caps Valuation confidence; high beta/volatility and a mixed sentiment tape cap Timing confidence; the empty earnings-calendar call has minor impact (date inferred). Economic Alignment uses the fresh 2026-06-17 MacroEconomic report (sector map). Fact-check: price $13.94, ISIN US75776W1036, Q1'26 rev $97.0M (+58%), consensus target $17.60, grades 8/1/1, shares ~199M — all confirmed against pulled data.
DISCLAIMER: This is a quantitative framework for educational purposes only. It is not financial advice. Always do your own research and consult a licensed financial advisor before making investment decisions.