Prediction: This Will Be Redwire's Stock Price by the End of 2030

Investors are always on the hunt for the next big opportunity. And as trends like generative artificial intelligence (AI) get long in the tooth, many are thinking about the next big trend. Some are wondering if space technology could be the next to boom.

Florida-based integrated aerospace and defense technology company Redwire (NYSE: RDW) is catching attention for its relatively small size and compelling long-term growth drivers in space and defense. Let's dig deeper into the company's pros and cons to determine what its shares might be worth by the end of 2030.

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What is Redwire?

Unlike its larger rival, Space Exploration Technologies, Redwire is far from a household name, even among those who have a passing interest in space technology. But that doesn't mean it's irrelevant. Despite having a market cap of just $2.1 billion, the company has established an impressive track record as a trusted partner of the U.S. National Aeronautics and Space Administration (NASA).

Redwire's solar arrays help power the International Space Station. And its hardware has been featured in a variety of high-profile missions, including Artemis 1 and Artemis 2, which aim to return humans to the moon.

Government-derived revenue is notoriously choppy. Even if a company wins a big contract in one year, it won't necessarily win one again the next year, leading to a lack of consistent year-over-year growth that investors like to see.

That said, these deals should still catch investors' attention because they indicate that Redwire is a serious company with serious technical capabilities. And these advantages could constitute an economic moat that rivals will find difficult to replicate.

Business is booming -- or is it?

Redwire's second-quarter earnings offer various clues about its health and trajectory. Top-line results were impressive, with second-quarter revenue soaring 89% year over year to $117.1 million. Demand for the company's products and services is outstripping supply. And with an order backlog worth $542.1 million, investors should expect the momentum to continue over the next few quarters.

That said, there is a catch. In June, Redwire acquired drone and defense company Edge Autonomy for a combination of cash and stock worth $925 million. Much of the recent growth comes from the new business's contribution to Redwire's existing operations. And over the coming years, management will have to turn this highly dilutive deal into real value for shareholders.

It is notoriously difficult to make acquisitions work. According to research from Fortune Magazine, 70% to 75% of them fail to drive meaningful returns. That said, Redwire's acquisition of Edge Autonomy has advantages that might make it an exception.

Edge Autonomy gives Redwire access to the fast-growing opportunity in military drones, which have rapidly gained relevance after the war in Iran exposed the limitations of conventional military technologies.

The company produces a range of unmanned aerial systems (UAS) designed for intelligence gathering and surveillance, positioning Redwire to benefit from military modernization. Redwire has already won military contracts, including a $13.8 billion deal to supply UAS to the National Guard. And under the Trump administration, the Department of Defense is requesting a $1.5 trillion military budget, which will likely involve substantial investments in next-generation combat hardware if it goes through

What will the stock be worth by the end of 2030?

When betting on small, next-generation technology companies, investors are taking on high risk in pursuit of multibagger rewards. That said, the pros of Redwire seem to outweigh the cons right now.

With a price-to-sales (P/S) multiple of just 3.6, the stock is reasonably valued compared to the S&P 500 (SNPINDEX: ^GSPC) average of 3.7. A low price tag combined with an innovation-led business model suggests the stock is capable of substantially exceeding the market's average annual return of 10%.

If Redwire rises 15% annually, the stock could be priced at around $12.78 by the end of 2030 -- a gain of 52%. Growth could be substantially larger if the company wins more high-profile contracts within that time frame.

Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.