Redwire Corp. (RDW) shares fell sharply Monday. The decline marks the largest single-day percentage drop in six months. Jefferies downgraded the stock from Buy to Hold, citing valuation concerns following a recent price surge.
Jefferies increased its price target from $13 to $24 despite the rating cut. The firm noted the stock has tripled year-to-date, driven largely by sector-wide excitement. Redwire currently trades at nearly nine times its estimated annual sales. This valuation represents a significant jump from just over three times sales last year.
Analysts see limited near-term upside as the company remains unprofitable. Jefferies is waiting for Redwire to convert its order backlog into consistent revenue and earnings. The firm believes the stock's rapid appreciation has outpaced its actual financial performance.