Redwire Stock Jumps on $44 Million DARPA Contract Win
The award for an advanced air-breathing spacecraft mission provides a boost to the space infrastructure firm amid a challenging year for its shares.
Shares of Redwire Corporation (NYSE: RDW) surged more than 6% in morning trading after the space infrastructure company announced it had secured a significant $44 million contract from the Defense Advanced Research Projects Agency (DARPA).
The award is for Phase 2 of DARPA's Otter program, which is focused on developing a new generation of air-breathing spacecraft for very low-Earth orbit (VLEO) missions. The contract provides a crucial vote of confidence in Redwire's technology and its strategic importance to national defense initiatives.
In morning trading, Redwire's stock climbed to $5.78, a gain of 6.5%, on higher-than-average volume. The contract represents a material win for the Jacksonville, Florida-based company, amounting to nearly 5% of its approximately $897 million market capitalization. This award follows a string of government and defense contracts the company has secured, underscoring its growing role as a key supplier in the aerospace sector.
"This award is a testament to Redwire's leadership in VLEO technology and our commitment to delivering innovative, mission-critical solutions for our national security partners," said Peter Cannito, Chairman and CEO of Redwire, in a company press release.
The contract comes at a pivotal time for Redwire. Despite achieving significant year-over-year revenue growth, the company has faced financial headwinds. For the third quarter of 2025, Redwire reported a 50.7% increase in revenue to $103.4 million, but it also posted a net loss as it continues to invest in program development. The company's stock has reflected these challenges, declining nearly 50% over the past year from a 52-week high of $26.66.
This new funding from DARPA provides a welcome catalyst and reinforces the company's strategic pipeline. Government contracts are the lifeblood for companies in the space and defense industries, offering long-term revenue visibility and validating advanced technology. According to regulatory filings, a significant portion of Redwire's business is tied to government and prime contractor clients, making awards like the Otter contract essential for its growth trajectory.
Analysts have a consensus price target of $14.00 on Redwire's stock, suggesting significant upside from its current levels. The majority of analysts covering the company maintain a 'buy' or 'strong buy' rating, banking on the long-term potential of the space economy and Redwire's diverse portfolio, which includes deployable structures, in-space manufacturing, and digital engineering.
The Otter program aims to develop spacecraft that can collect and use ambient air as a propellant, a technology that could dramatically extend mission endurance and capabilities in VLEO. This orbit, below 400 kilometers, is becoming increasingly strategic for intelligence, surveillance, and reconnaissance (ISR) missions due to its proximity to Earth, but it presents significant challenges like atmospheric drag.
For investors, the $44 million contract serves as a tangible data point that Redwire's strategy is gaining traction. While the company continues to navigate the complexities of scaling its operations and achieving profitability, its ability to win competitive, high-profile defense contracts demonstrates its established position in the national security space supply chain.