US durable goods orders show particular strength in transport equipment and defense aircraft. That points attention to aerospace and defense stocks just as investors reassess where growth and cash flows may prove more resilient. Aerospace and defense companies can offer access to long contract cycles and government backed demand. This article walks through three stocks from our Aerospace And Defense screener that highlight different ways to gain that exposure.

The stocks covered below are just a starting sample from the Aerospace and Defense idea. The full screen surfaced 73 more companies with equally compelling narratives that are not included here. To identify and analyze the opportunities that best fit your own thesis, head straight into the Aerospace And Defense screener.

Redwire (RDW)

Overview: Redwire is a space infrastructure and defense technology company that builds the hardware and mission systems that sit on satellites, spacecraft and uncrewed aerial platforms, including star trackers, sun sensors, camera systems, RF payloads, antennas, spacecraft platforms and in space manufacturing facilities. Alongside this core aerospace and defense work, it also sells software for digital engineering and simulations, microgravity research labs and biotech payloads to government and commercial customers.

Operations: Redwire generates roughly US$208.9 million from its Space segment and US$217.4 million from Defense Tech, with revenue primarily from the United States and Europe.

Market Cap: US$2.8 billion

Redwire gives investors direct exposure to space hardware and defense systems at a time when multi year satellite constellations, NATO contracts and Space Force awards are contributing to a record backlog. The company is still working through losses and a debt heavy balance sheet. The appeal lies in its mix of spacecraft sensors, RF payloads, in space manufacturing and uncrewed systems that tie into long running government and commercial programs. The key risks include complex fixed price contracts, share dilution and an unproven push into microgravity pharmaceuticals. For investors interested in the Aerospace and Defense theme, Redwire’s Defense Tech footprint and contract pipeline make it a company to monitor closely.

Redwire’s backlog story is only half the picture. Government programs and in space ambitions can look exciting, yet the real twist sits inside the 2 key rewards and 3 important warning signs (1 is major!)

Rocket Lab (RKLB)

Overview: Rocket Lab is a space company that gives you direct exposure to the Aerospace and Defense theme through its Electron launch vehicle, upcoming Neutron rocket and a growing business that designs, builds and operates satellites and related space systems for commercial, government and defense customers.

Operations: Rocket Lab generates about US$544 million from its Space Systems segment and around US$225 million from Launch Services.

Market Cap: US$39.6 billion

Rocket Lab offers a pure play on space launch and satellite infrastructure, which is central to modern defense and communications, with Electron flights, Neutron under development and a sizeable Space Systems arm that builds and runs satellites for agencies such as the U.S. Space Force. The potential acquisition of Iridium and a stream of new contracts indicate a wider role across launch, satellites and global connectivity. However, investors still face meaningful funding and dilution risk while the company works toward sustained profitability. If Neutron reaches regular service and the combined launch and satellite businesses scale as planned, the value of Rocket Lab’s position in the space backbone could look very different to today’s share price.

Rocket Lab’s expanding launch and satellite platform suggests a bigger story than today’s market cap implies, yet the real turning point sits inside the analyst forecasts for Rocket Lab where one key assumption could change everything.

Kratos Defense & Security Solutions (KTOS)

Overview: Kratos Defense & Security Solutions is a defense technology company that develops jet powered unmanned aerial systems, hypersonic vehicles, propulsion systems and microwave electronics used in missiles, radar, satellite and communication programs for the U.S. Department of Defense, allied governments and select commercial customers. Alongside these aerospace and defense products, Kratos also provides virtualized satellite ground systems, command and control software, counter drone solutions and training systems for national security agencies worldwide.

Operations: Kratos generates about US$317.4 million from its Unmanned Systems segment and roughly US$1.21b from Kratos Government Solutions, with the majority of revenue coming from U.S. customers.

Market Cap: US$9.9b

Kratos Defense & Security Solutions provides focused exposure to several key areas of modern defense, including jet powered drones, hypersonic test vehicles and propulsion for missiles and loitering munitions, all of which are being used across U.S. and allied aerospace programs. That mix of first mover programs, a multi billion dollar backlog and long relationships with defense customers is balanced by pressure points such as heavy upfront investment, reliance on a small group of suppliers and a funding model that leans on external capital while free cash flow remains under strain. For investors analyzing how unmanned systems and hypersonics are reshaping air and missile defense, Kratos may be a company to examine in more detail.

Kratos appears to be an unmanned and hypersonic story still hiding its full potential, yet the real clue sits in the 2 key rewards and 1 important warning sign

Seeking Fresh Alternatives Before They Fly

New ideas move fast. By the time everyone is talking about them, the best entry points can be gone. Scan fresh stock sets that are still under the radar and consider acting before they become widely followed.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.