Jim Cramer Suggests Avoiding Redwire (RDW) In A Rate Tightening Cycle

Jim Cramer Suggests Avoiding Redwire (RDW) In A Rate Tightening Cycle

Syeda Seirut Javed

Sat, September 19, 2026 at 9:36 PM GMT+3 3 min read

• RDW -7.01%

On September 16, toward the end of the lightning round, a caller asked what Jim Cramer thinks of Redwire Corporation (NYSE:RDW). Mad Money host replied:

We are in a rate-tightening cycle. In a rate tightening cycle, we cannot buy companies that are losing money left and right. It just won't work.

Record Revenue Expansion Driven By Defense Technology Segments

Redwire Corporation (NYSE:RDW) reported a robust second quarter for 2026 with total revenue surging 89.6% year-over-year to reach a record $117.1 million, outperforming the estimates by around $9.4 million. The top-line acceleration was largely powered by its defense technology segment following strategic contracts and expanding programs with international defense partners, including major uncrewed aerial systems deployments. The company also posted a record gross margin of 27.8% along with a record order backlog totaling $542.1 million. Such metrics highlight that core operating units within its specialized defense portfolio are capturing noteworthy market demand.

Valuation Pressures And Persistent Bottom-Line Profitability Headwinds

Despite impressive top-line growth, Redwire Corporation (NYSE:RDW) continues to struggle with bottom-line profitability, reporting an adjusted EBITDA loss of $3.2 million and a net loss of $41 million for Q2 2026. Traditional space segments experience relative stagnation while operating expenses and negative free cash flow weigh heavily on financial stability. At a price-to-sales ratio of 4.96, the stock trades at elevated multiples relative to the sector median and the company's historic valuation, and dilution from recent equity distribution agreements significantly increases total share counts. Operating cash flow remains negative while capital expenditure requirements expand across manufacturing footprints in Indiana and Alabama.

Smart Money Backing And Bearish Float

According to Insider Monkey tracking data, 24 hedge funds held positions in the company during the second quarter, marking a decline from 32 funds in the prior quarter. However, it is worth noting that some major hedge funds increased their stakes significantly in the second quarter. D E Shaw and Millennium Management increased their position in the stock by 72% and 349%, respectively, as per Insider Monkey. At the same time, Renaissance Technologies initiated a position of about 9.4 million shares worth nearly $115 million and was the largest shareholder among hedge funds tracked by Insider Monkey. Short interest accounts for 18.66% of the public float, highlighting significant bearish positioning among short sellers monitoring the ongoing cash burn for Redwire Corporation (NYSE:RDW).

With a high short interest and substantial quarterly net loss overshadowing its record defense backlog, the company faces an uphill battle to prove that its solid top-line expansion can translate into actual bottom-line earnings before high interest rates penalize its premium sales multiple.

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