Why Redwire Stock Is Soaring Today

Extending gains that first started taking shape in early May, shares of aerospace outfit Redwire (NYSE: RDW) are up again today. In fact, their 27.7% gain as of 11:50 a.m. ET Tuesday is one of their best single-day moves in months, pushing the stock to levels last seen in early 2025.

Just don't look for a company-specific reason for today's big jump. You won't find it. Rather, RDW is riding a wave of euphoria surrounding a higher-profile name in the business that's lifting a bunch of space stocks.

Full steam ahead

That name is SpaceX, of course. While everyone knew it was coming sooner than later, the company officially filed its S-1 form with the SEC last week, moving forward with its plans to go public. The market's been buzzing ever since. In fact, interest in SpaceX's IPO (initial public offering) has also generated interest in other names in and around the businesses. Redwire is one of these names.

Image source: Getty Images.

And it's certainly given interested investors much to like of late. Just last week the company announced a multiyear, eight-figure contract to help a NATO ally modernize its aerial drone fleet. Separately, also last week, Redwire announced a $15 million expansion of an existing drone contract with the U.S. Army.

This company isn't just a maker of military hardware, though. The day after reporting its expanded deal with the U.S. Army, Redwire delivered a prototype of its lunar robotic arm to the European Space Agency, demonstrating it's one of the companies that can help humankind return to the moon.

Of course, the early May release of Redwire's solid Q1 results had already painted a bullish picture, making the market receptive and responsive to these developments. The company's top line of nearly $97 million for the three months ending in March was up 58% year over year. Just as important, its backlog now stands at a record $498 million.

Not yet

The news is clearly good, but is the stock a buy? Right now, probably not.

Don't misread the message. There will come a time when RDW shares are attractively priced. This is not that time, however. Not only is this stock overvalued as a result of the recent run-up, but the sheer speed and scope of the rally since early May is dangerous simply because it invites so much immediate profit-taking.

In other words, if you're interested, you'll probably want to hold out for a healthy dip.

James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Redwire. The Motley Fool has a disclosure policy.