Redwire shares drop amid strong Q1 revenue growth but thin margins and ongoing losses.

Redwire's shares have fallen sharply after a surge in Q1 revenues by 58% year-over-year to $97 million, highlighting strong sales growth. However, the company faces challenges with thin gross margins and persistent GAAP losses, raising concerns about profitability. Management projects revenues between $450 million and $500 million for 2025, which is significantly higher than the current pace, but the company also plans a $500 million ATM offering, indicating potential dilution. Despite risks related to margin improvement and cash burn, Redwire's valuation at 7 times sales with over 20% projected annual revenue growth presents an attractive entry point for investors willing to accept high risk.