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Karman Holdings Inc.
(NYSE:KRMN)
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Rating:56Neutral
Price Target:
$34.00
▼(-30.89% Downside)
Action:Reiterated
Date:09/16/26
The score is held back primarily by weak cash flow quality (negative TTM free cash flow) and a clearly bearish technical setup (below all key moving averages with weak momentum). Offsetting these are strong operational momentum and improved outlook from the latest earnings call (raised guidance, record backlog), while valuation remains demanding with a very high P/E.
Positive Factors
Strong Revenue and Profit Growth
Rapid revenue and profit expansion indicates strong demand and operating leverage across the business. If sustained, the higher earnings base can support capacity investment, strengthen customer relationships, and provide resources for continued organic growth and selective acquisitions.
Negative Factors
Weak Free Cash Flow Conversion
Negative free cash flow shows that reported earnings are not yet translating consistently into cash available for debt reduction or reinvestment. Working-capital volatility and elevated investment needs could constrain financial flexibility while Karman is pursuing rapid expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Revenue and Profit Growth
Rapid revenue and profit expansion indicates strong demand and operating leverage across the business. If sustained, the higher earnings base can support capacity investment, strengthen customer relationships, and provide resources for continued organic growth and selective acquisitions.
Read all positive factors
Karman Holdings Inc. (KRMN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.32B
Dividend YieldN/A
Average Volume (3M)3.69M
Price to Earnings (P/E)114.8
Beta (1Y)1.79
Revenue Growth50.23%
EPS Growth365.67%
CountryUS
Employees1,400
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.28
Shares Outstanding132,533,700
10 Day Avg. Volume3,103,411
30 Day Avg. Volume3,692,410
Financial Highlights & Ratios
PEG Ratio15.96
Price to Book (P/B)25.30
Price to Sales (P/S)20.53
P/FCF Ratio-228.05
Enterprise Value/Market Cap1.72
Enterprise Value/Revenue12.62
Enterprise Value/Gross Profit30.28
Enterprise Value/Ebitda47.11
Forecast
1Y Price Target
$79.38Price Target Upside61.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)0.59
Revenue Forecast (FY)$741.45M
Karman Holdings Inc. Business Overview & Revenue Model
Company Description
Karman Holdings Inc., primarily operating through its Karman Space and Defense division, specializes in the design, rigorous testing, production, and sale of vital systems. These critical components are integral to sectors such as missile and defe...
Karman Holdings Inc. Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The call highlights strong, broad-based operational and financial momentum: record revenue, backlog and bookings; high organic growth (24.4% in the quarter) and raised full-year guidance with robust adjusted EBITDA expansion. Management is actively expanding capacity, integrating acquisitions, adding international presence, and addressing governance (PwC selection and material weakness remediation). Near-term risks include elevated leverage (~3.7x), working capital absorption (AR growth and $4M cash used in ops), margin normalization from contract mix and acquisition effects, pending contingent agreement conversions, and regulatory review for the Walker acquisition. On balance, the positives — substantial top-line and profit growth, record backlog/bookings, capacity scaling and raised guidance — materially outweigh the manageable execution and financing risks called out on the call.Positive Updates
Record Quarterly Revenue and Strong Growth
Revenue of $182.0M in Q2, up 58% year-over-year and 20.4% sequentially; six-month revenue $333M, up 55% year-over-year.
Negative Updates
High Leverage
Net debt of $752M at quarter end with pro forma Q2 leverage ~3.7x adjusted EBITDA; management expects ~3.5x pro forma by year-end subject to acquisition approvals.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue and Strong Growth
Revenue of $182.0M in Q2, up 58% year-over-year and 20.4% sequentially; six-month revenue $333M, up 55% year-over-year.
Read all positive updates
Company Guidance
Karman raised 2026 guidance to revenue of $730–$745 million and non‑GAAP adjusted EBITDA of $215–$222.5 million (≈29.7% margin at the midpoint), reaffirmed ≥25% organic growth for 2026 (20–25% target multi‑year), and noted record backlog of $1.3 billion and nearly $500 million of Q2 bookings with ~95% visibility to the midpoint; they expect H2 revenue to step up with an approximate 47%/53% Q3/Q4 split, accelerating volume/cash in H2 and delivering $15–$20 million of free cash flow, model a statutory tax rate of 26.5% and CapEx of ~5% of revenue (~$37 million), reported net debt of $752 million and Q2 pro‑forma leverage of ~3.7x (targeting ~3.5x pro‑forma by year‑end), and highlighted financing improvements including a term‑loan repricing to SOFR+2.25% (≈$4 million annual interest savings) and an expanded $150 million revolver.Karman Holdings Inc. Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
71
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Mar 2025 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 589.55M | 471.50M | 345.25M | 280.70M | 226.31M |
| Gross Profit | 245.65M | 190.03M | 132.11M | 105.55M | 80.95M |
| EBITDA | 157.92M | 119.83M | 97.86M | 76.24M | 55.21M |
| Net Income | 37.18M | 17.37M | 12.70M | 4.36M | -14.10M |
Balance Sheet | |||||
| Total Assets | 1.44B | 1.14B | 773.96M | 710.83M | 682.59M |
| Cash, Cash Equivalents and Short-Term Investments | 51.74M | 33.96M | 11.53M | 5.45M | 6.63M |
| Total Debt | 875.26M | 587.31M | 447.87M | 409.33M | 403.58M |
| Total Liabilities | 1.02B | 759.98M | 577.96M | 528.37M | 505.00M |
| Stockholders Equity | 421.10M | 382.69M | 196.00M | 182.46M | 177.60M |
Cash Flow | |||||
| Free Cash Flow | -27.67M | -42.45M | 11.39M | 3.55M | -27.16M |
| Operating Cash Flow | 5.86M | -22.12M | 26.65M | 20.33M | -5.89M |
| Investing Cash Flow | -328.80M | -238.27M | -46.24M | -16.21M | -21.26M |
| Financing Cash Flow | 347.24M | 282.82M | 25.67M | -5.29M | 16.73M |
Karman Holdings Inc. Technical Analysis
Negative
49.20
Price Trends
43.72
Negative
47.58
Negative
67.85
Negative
Market Momentum
-2.82
Negative
37.92
Neutral
24.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRMN, the sentiment is Negative. The current price of 49.2 is above the 20-day moving average (MA) of 33.97, above the 50-day MA of 43.72, and below the 200-day MA of 67.85, indicating a bearish trend. The MACD of -2.82 indicates Negative momentum. The RSI at 37.92 is Neutral, neither overbought nor oversold. The STOCH value of 24.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KRMN.
Karman Holdings Inc. Risk Analysis
Karman Holdings Inc. disclosed 70 risk factors in its most recent earnings report. Karman Holdings Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Karman Holdings Inc. Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $4.72B | 23.30 | 4.44% | ― | 11.44% | 291.35% | |
67 Neutral | $4.87B | 62.92 | 3.73% | 0.23% | 23.35% | 56.45% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $7.95B | 245.84 | 1.14% | ― | 25.50% | 86.96% | |
57 Neutral | $4.84B | -156.91 | -2.01% | 3.82% | 7.85% | 22.99% | |
56 Neutral | $4.32B | 114.78 | 9.42% | ― | 50.23% | 365.67% | |
54 Neutral | $6.97B | -23.56 | -6.64% | ― | 84.44% | -541.91% |
* Industrials Sector Average
KRMN
Karman Holdings Inc.
32.59
-46.48
-58.78%
AVAV
AeroVironment
137.11
-272.72
-66.54%
KTOS
Kratos Defense
42.36
-53.92
-56.00%
MRCY
Mercury Systems
79.49
2.80
3.65%
VSEC
VSE
173.63
16.22
10.31%
AMTM
Amentum Holdings, Inc.
19.29
-4.40
-18.57%
Karman Holdings Inc. Corporate Events
Business Operations and StrategyFinancial Disclosures
Karman Holdings Highlights Strong Post-IPO Growth Momentum
Positive
Sep 16, 2026
On September 16, 2026, Karman Holdings Inc. released an investor presentation highlighting that Karman Space Defense is outperforming the financial and strategic commitments set at its IPO. The company reported organic growth above 25 percent for...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Karman Holdings Acquires Walker, Expands European Defense Footprint
Positive
Aug 28, 2026
On August 26, 2026, Karman Holdings Inc. amended its existing credit agreement to increase the principal amount of its term loans by $100 million, bringing the total original principal to about $863.96 million, to help fund its acquisition of Walk...
Business Operations and StrategyExecutive/Board Changes
Karman Holdings Appoints New Chief Financial Officer
Positive
Aug 27, 2026
On August 26, 2026, Karman Holdings Inc. announced that veteran aerospace and defense finance executive Chris Boynton will become Executive Vice President and Chief Financial Officer on September 14, 2026. He succeeds current CFO Mike Willis, who ...
Business Operations and StrategyPrivate Placements and Financing
Karman Holdings Refinances Credit Agreement, Lowers Interest Costs
Positive
Aug 6, 2026
On August 3, 2026, Karman Holdings Inc. entered into a Fifth Amendment to its existing Credit Agreement with Citibank, N.A. and other lenders, under which it refinanced $763,961,000 of term loans to lower the interest rate by 50 basis points to SO...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.