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Karman Holdings Inc. (KRMN)
NYSE:KRMN
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Karman Holdings Inc.
(NYSE:KRMN)
65Neutral
Positive Factors
Industry Dynamics
Analyst sees share upside to a range of $41 to $48 on favorable industry dynamics.
Revenue Growth
Karman reported an organic revenue growth acceleration to 19%, up from 16% last quarter.
Negative Factors
Market Impact
Shares were impacted on reports that China may curb the export of precious metals, even though there does not appear to be any impact on Karman’s business.
Valuation Concerns
The main risk to shares is the company’s premium valuation multiple and high exposure to U.S. Department of Defense spending.
Karman Holdings Inc. (KRMN) vs. S&P 500 (SPY)
Market Cap
$5.73B
Dividend YieldN/A
Average Volume (3M)925.36K
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees1,113
SectorIndustrials
Sector Strength89
IndustryAerospace & Defense
Share Statistics
EPS (TTM)-0.04
Shares Outstanding132,174,590
10 Day Avg. Volume793,853
30 Day Avg. Volume925,364
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)26.17
Price to Sales (P/S)0.00
P/FCF Ratio-3.40K
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$38.67Price Target Upside11.12% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Karman Holdings Inc. Business Overview & Revenue Model
Company DescriptionKarman Holdings Inc., through its subsidiary, Karman Space and Defense, engages in designing, testing, manufacturing, and sale of mission-critical systems for missile and defense, space programs, hypersonic, and launch vehicle markets. It also supplies metallic and composite flight hardware and sub-assemblies. In addition, the company provides solutions for payload protection and deployment systems, aerodynamic interstage systems, and propulsion systems. The company was incorporated in 2020 and is based in Huntington Beach, California. Karman Holdings Inc. is a subsidiary of TCFIII Spaceco SPV LP.
How the Company Makes Money
Karman Holdings Inc. Financial Statement Overview
Summary
Karman Holdings Inc. shows strong revenue and profit growth with efficient operations. However, high leverage and negative equity pose financial risks. Positive cash flow growth indicates improved liquidity, but reliance on financing activities remains a concern.Income Statement
Karman Holdings Inc. has demonstrated strong revenue growth, with a significant increase from 2023 to 2024. The company's gross profit margin remains healthy, indicating efficient cost management. Net profit margin shows improvement, turning positive in 2024, which is a notable achievement. EBIT and EBITDA margins are robust, reflecting solid operational performance.78
Positive
Balance Sheet
The balance sheet reveals high leverage, with a substantial debt-to-equity ratio due to negative equity, posing a risk. However, the company's assets have grown, showing expansion potential. The negative stockholders' equity is a concern, indicating potential financial instability.40
Negative
Cash Flow
The cash flow statement shows positive free cash flow growth and improved operating cash flow, which are positive indicators of liquidity and operational efficiency. However, reliance on financing activities and previous negative free cash flow highlight potential cash flow management challenges.65
Positive
| Breakdown | ||
| Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|
| Income Statement | Total Revenue | |
| 345.25M | 280.71M | 226.31M | Gross Profit |
| 132.11M | 105.55M | 80.95M | EBIT |
| 63.56M | 48.49M | 20.43M | EBITDA |
| 96.36M | 75.67M | 55.42M | Net Income Common Stockholders |
| 12.70M | 4.36M | -14.10M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 11.53M | 5.45M | 6.63M | Total Assets |
| 773.96M | 710.83M | 682.59M | Total Debt |
| 447.87M | 409.33M | 403.58M | Net Debt |
| 436.34M | 403.88M | 396.95M | Total Liabilities |
| 577.96M | 528.37M | 505.00M | Stockholders Equity |
| 196.00M | 0.00 | 0.00 |
| Cash Flow | Free Cash Flow | |
| 11.39M | 3.55M | -27.16M | Operating Cash Flow |
| 26.65M | 20.33M | -5.89M | Investing Cash Flow |
| -46.24M | -16.21M | -21.26M | Financing Cash Flow |
| 25.67M | -5.29M | 16.73M |
Karman Holdings Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.72B | 27.45 | 18.78% | 0.53% | 7.85% | 15.78% | |
74 Outperform | $5.73B | 26.53 | 6.93% | ― | -4.01% | -8.86% | |
71 Outperform | $5.40B | 278.78 | 1.45% | ― | 7.32% | ― | |
71 Outperform | $4.70B | 66.69 | 2.61% | ― | 23.40% | -55.55% | |
65 Neutral | $5.73B | ― | ― | ― | ― | ||
64 Neutral | $4.43B | 12.01 | 5.15% | 249.50% | 3.98% | -11.60% | |
64 Neutral | $4.70B | ― | 0.86% | ― | 20.95% | ― |
* Industrials Sector Average
Performance Comparison
KRMN
Karman Holdings Inc.
44.32
12.32
38.50%
FSS
Federal Signal
95.36
9.50
11.06%
KTOS
Kratos Defense
35.21
14.18
67.43%
GTES
Gates Industrial
22.15
4.80
27.67%
BE
Bloom Energy
20.11
7.78
63.10%
GXO
GXO Logistics
42.27
-10.36
-19.68%
Karman Holdings Inc. Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -13.35%|
Next Earnings Date:Apr 14, 2026
Earnings Call Sentiment Positive
The Q1 earnings call for Karman Space & Defense highlighted strong financial performance, robust segment growth, successful IPO, and strategic positioning in defense and space markets. However, challenges included declining SLS program revenue and IPO-related expenses impacting net income. Overall, the highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Record Quarterly Financial Performance
Karman Space & Defense reported record quarterly revenue of $100 million, gross profit of $39.5 million, and adjusted EBITDA of $30 million. Their funded backlog reached a record $636 million, and revenue visibility for 2025 increased to approximately 95%.
Strong Revenue Growth Across Key Segments
Hypersonics and strategic missile defense revenue grew by 21.1%, tactical missiles and integrated defense systems revenue by 29.6%, and space and launch revenue by 12% year-over-year.
Gross Margin and EPS Improvement
Gross margin expanded by 450 basis points to 39.4% year-over-year, with a 67% increase in fully diluted adjusted EPS from $0.03 to $0.05.
Successful IPO and Debt Refinancing
Completed an IPO in February 2025, which helped pay off a $25 million revolving credit facility. Refinanced existing credit facilities, reducing net interest rates and extending maturities.
Strong Positioning in Emerging Markets
Positioned well to benefit from U.S. DoD budget increases, particularly in hypersonics and missile defense, and from commercial space launch growth.
Negative Updates
Decline in SLS Program Revenue
Revenue from the SLS program has decreased and is expected to be a negligible part of future forecasts.
Share-Based Compensation Impact
Incurred approximately $8 million in share-based compensation expenses due to the IPO, which affected net operating income and led to a net loss in the quarter.
Company Guidance
During the Karman Space & Defense First Quarter Fiscal Year 2025 earnings call, the company provided a robust outlook for the fiscal year, reaffirming guidance for total revenue between $423 million and $433 million, which represents a 24% year-over-year growth. The company also projected adjusted EBITDA between $132 million and $137 million, indicating a 27% growth. Key financial achievements included record quarterly revenue of $100.1 million, a year-over-year increase of 20.6%, and a gross margin expansion of 450 basis points to 39.4%. Karman reported a record quarterly adjusted EBITDA of $30 million, a 30% margin, and a fully diluted adjusted EPS increase of 67% to $0.05. The company achieved a record funded backlog of $636 million and increased its full-year 2025 revenue visibility to approximately 95% as of the end of April. Capital expenditures are expected to total approximately 4% of revenue, supporting facility improvements and capacity expansions.Karman Holdings Inc. Corporate Events
Private Placements and FinancingM&A Transactions
Karman Holdings Acquires MTI Partners and Metal Machining
Positive
Apr 7, 2025
On April 1, 2025, Karman Holdings Inc. successfully refinanced its credit facilities by entering a new Credit Agreement with Citibank, replacing the previous term loan and revolving credit facility. This refinancing extends maturity dates significantly and reduces interest expenses, saving over $8 million annually. Additionally, on April 4, 2025, Karman announced a Securities Purchase Agreement to acquire MTI Partners LLC and Metal Machining LLC for $90 million, enhancing its strategic growth and acquisition capabilities.
Delistings and Listing ChangesPrivate Placements and Financing
Karman Holdings Inc. Raises $147M in Successful IPO
Positive
Feb 19, 2025
On February 12, 2025, Karman Holdings Inc. priced its initial public offering (IPO) of 23,000,000 shares at $22.00 per share, with the IPO closing on February 14, 2025. The company raised approximately $147 million from the IPO, excluding proceeds from shares sold by existing stockholders, and intends to use the funds for corporate purposes including development, working capital, and operating expenses.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.