The analysts might have been a bit too bullish on Redwire Corporation (NYSE:RDW), given that the company fell short of expectations when it released its third-quarter results last week. Revenues missed expectations somewhat, coming in at US$69m, but statutory earnings fell catastrophically short, with a loss of US$0.37 some 190% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the consensus forecast from Redwire's five analysts is for revenues of US$361.1m in 2025. This reflects a substantial 21% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 73% to US$0.33. Before this latest report, the consensus had been expecting revenues of US$357.5m and US$0.27 per share in losses. So it's pretty clear the analysts have mixed opinions on Redwire even after this update; although they reconfirmed their revenue numbers, it came at the cost of a notable increase in per-share losses.

Although the analysts are now forecasting higher losses, the average price target rose 16% to 8.55, which could indicate that these losses are expected to be "one-off", or are not anticipated to have a longer-term impact on the business. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Redwire, with the most bullish analyst valuing it at US$13.00 and the most bearish at US$6.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that Redwire's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.3% 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 important thing to note is the forecast of increased losses next year, suggesting all may not be well at Redwire. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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. We have estimates - from multiple Redwire analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Redwire .

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