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KBR Inc (KBR)
NYSE:KBR
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KBR
(NYSE:KBR)
73Outperform
Positive Factors
Energy Transition
KBR is well positioned as a key player throughout all stages of the energy transition, with strong opportunities in energy advisory consulting.
Government Contracts
KBR has ~75% of projected 2025 revenues already under contract (~80% in Government Solutions).
Strategic Partnerships
KBR was selected for engineering and project management roles for Shell’s Manatee LNG project, Oman LNG project and Saudi Aramco’s Shaybah Project.
Negative Factors
Market Sentiment
A less-rich catalyst roadmap and emerging risks limit upside to Street estimates, leading to a downgrade from Buy to Hold.
Military Services Demand
The Administration transition could lead to changes in military services demand, impacting more than 25% of KBR's sales.
Project Execution Risks
Fewer catalysts and execution risks related to project timing have been highlighted, affecting the stock's potential for growth.
KBR (KBR) vs. S&P 500 (SPY)
Market Cap
$6.66B
Dividend Yield1.2%
Average Volume (3M)2.03M
Price to Earnings (P/E)18.4
Beta (1Y)0.60
Revenue Growth11.30%
EPS GrowthN/A
CountryUS
Employees38,000
SectorIndustrials
Sector Strength68
IndustryEngineering & Construction
Share Statistics
EPS (TTM)2.80
Shares Outstanding129,735,170
10 Day Avg. Volume1,335,792
30 Day Avg. Volume2,027,808
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.86
Price to Cash Flow (P/CF)41.50
P/FCF Ratio97.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$70.00Price Target Upside47.24% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
KBR Business Overview & Revenue Model
Company DescriptionKBR, Inc. is a global technology and engineering solutions company headquartered in Houston, Texas. It operates in various sectors, including aerospace and defense, technology and consulting, and energy. KBR provides a broad range of services, including scientific research, project management, and engineering design, catering to both government and commercial clients. The company is known for delivering innovative solutions and services that drive advancements in mission-critical operations.
How the Company Makes MoneyKBR generates revenue through a combination of government and commercial contracts across its diverse sectors. The company's key revenue streams include engineering and construction services, technical consulting, and operations and maintenance services. Significant partnerships with entities such as the U.S. Department of Defense and NASA contribute to its earnings, as these contracts often involve long-term commitments and substantial value. Additionally, KBR earns from its technology solutions and proprietary products, particularly in the areas of energy and infrastructure, which further bolster its revenue.
KBR Financial Statement Overview
Summary
KBR's financial performance is robust, evidenced by strong revenue growth, improved net income, and efficient cash flow management. However, the company's leverage remains a consideration.Income Statement
KBR has demonstrated strong revenue growth, with a 7.7% increase in the most recent year. The company also achieved a healthy gross profit margin of 14.2% and a significant improvement in net income from a loss to a profit of $375 million, resulting in a net profit margin of 4.8% for 2025. Additionally, the EBIT margin improved to 8.5%. However, the EBITDA margin remains low at 8.5%, indicating room for improvement in operational efficiency.82
Very Positive
Balance Sheet
KBR's balance sheet shows a moderate debt-to-equity ratio of 1.92, reflecting a balanced approach to leveraging. The return on equity increased to 25.8%, indicating efficient use of shareholder funds. The equity ratio is at 21.8%, highlighting a stable capital structure, though there is a noticeable reliance on debt.75
Positive
Cash Flow
KBR's cash flow performance is strong, with a 53.4% increase in free cash flow, driven by higher operating cash flows. The operating cash flow to net income ratio is 1.23, suggesting effective cash earnings conversion. The free cash flow to net income ratio of 1.03 indicates that the company is successfully generating cash in line with its net income.78
Positive
| Breakdown | ||||
| Mar 2025 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.74B | 6.96B | 6.56B | 7.34B | 5.77B | Gross Profit |
| 1.10B | 977.00M | 828.00M | 806.00M | 666.00M | EBIT |
| 662.00M | 448.00M | 343.00M | 231.00M | 362.00M | EBITDA |
| 662.00M | 90.00M | 508.00M | 372.00M | 173.00M | Net Income Common Stockholders |
| 375.00M | -265.00M | 190.00M | 27.00M | -51.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 350.00M | 304.00M | 389.00M | 370.00M | 436.00M | Total Assets |
| 6.66B | 5.57B | 5.57B | 6.20B | 5.71B | Total Debt |
| 2.80B | 2.06B | 1.98B | 2.08B | 1.82B | Net Debt |
| 2.45B | 1.75B | 1.59B | 1.71B | 1.39B | Total Liabilities |
| 5.20B | 4.17B | 3.93B | 4.50B | 4.10B | Stockholders Equity |
| 1.45B | 1.38B | 1.62B | 1.69B | 1.58B |
| Cash Flow | Free Cash Flow | |||
| 385.00M | 251.00M | 325.00M | 241.00M | 347.00M | Operating Cash Flow |
| 462.00M | 331.00M | 396.00M | 278.00M | 367.00M | Investing Cash Flow |
| -776.00M | -70.00M | 37.00M | -428.00M | -877.00M | Financing Cash Flow |
| 374.00M | -359.00M | -402.00M | 87.00M | 225.00M |
KBR Technical Analysis
Negative
47.54
Price Trends
51.48
Negative
55.56
Negative
60.48
Negative
Market Momentum
-0.35
Negative
43.61
Neutral
31.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBR, the sentiment is Negative. The current price of 47.54 is below the 20-day moving average (MA) of 50.68, below the 50-day MA of 51.48, and below the 200-day MA of 60.48, indicating a bearish trend. The MACD of -0.35 indicates Negative momentum. The RSI at 43.61 is Neutral, neither overbought nor oversold. The STOCH value of 31.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KBR.
KBR Risk Analysis
KBR disclosed 44 risk factors in its most recent earnings report. KBR 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
KBR Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $12.30B | 26.38 | 26.35% | 0.99% | 8.89% | 669.67% | |
78 Outperform | $38.54B | 8.64 | 19.35% | 1.14% | 2.12% | 1.63% | |
73 Outperform | $6.66B | 18.38 | 26.45% | 1.20% | 11.30% | ― | |
72 Outperform | $5.71B | 2.78 | 72.85% | ― | 5.43% | 2094.12% | |
70 Outperform | $37.16B | 37.55 | 11.61% | ― | 11.95% | -1.25% | |
62 Neutral | $14.52B | 24.41 | 10.92% | 1.00% | -13.76% | -13.39% | |
62 Neutral | $8.08B | 13.63 | 3.82% | 3.13% | 3.58% | -14.35% |
* Industrials Sector Average
Performance Comparison
KBR
KBR
47.54
-16.12
-25.32%
ACM
Aecom Technology
89.25
-7.27
-7.53%
CBRE
CBRE Group
118.08
21.57
22.35%
DHI
DR Horton
127.87
-27.45
-17.67%
FLR
Fluor
31.02
-11.16
-26.46%
J
Jacobs Solutions
111.45
-9.51
-7.86%
KBR Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -4.92% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
KBR exhibited strong financial performance and strategic growth initiatives in 2024, with significant revenue and margin expansion. The company secured key contracts and demonstrated resilience through strategic realignment. While there are challenges in the ramp-up of the HomeSafe program and potential government funding delays, the overall outlook remains positive with expected double-digit growth in 2025.Highlights
Strong Financial Performance
KBR delivered $2.1 billion of revenue in Q4, bringing the 2024 total to $7.7 billion, representing a 23% growth for the quarter and 11% for the year. Adjusted EBITDA was $228 million for the quarter and $870 million for the full year, with an adjusted EBITDA margin up 50 basis points year-over-year.
Significant Contract Wins and Strategic Initiatives
KBR secured a $445 million contract for the DoD and an $88 million contract for rapid prototyping. Key wins include Lake Charles LNG project and several engineering roles with Shell, Oman LNG, and Saudi Aramco.
Growth in Sustainable Tech Solutions
Sustainable Tech Solutions revenue increased by 30% in Q4, with adjusted EBITDA margins at 20.6%. The full-year revenue was up 17%, demonstrating strong demand in ammonia, energy security, and decarbonization.
Successful Realignment and Resilient Business Model
KBR realigned its segments into Mission Tech and Sustainable Tech, enhancing agility and alignment with markets. The company also completed the acquisition of LinQuest, further solidifying its market position.
Positive Outlook for 2025
KBR expects double-digit growth in 2025, with projected revenues of $8.7 billion to $9.1 billion and adjusted EBITDA of $950 million to $990 million, supported by ongoing strategic execution and strong backlog.
Lowlights
Challenges with HomeSafe Program Ramp-Up
The HomeSafe program is in early ramp-up stages, with performance still being refined. The revenue contribution is projected between $300 million and $500 million for 2025, but the profitability impact is expected to be negligible during this phase.
Potential Impact of Government Funding Delays
There is significant probability of a full-year continuing resolution for the US government fiscal 2025, which could affect the timing of task orders and funding allocations within the Government Solutions segment.
Equity Income Decline in Q4
Equity earnings faced a notable drop in Q4 due to a noncash accounting adjustment related to Ichthys and a scope increase in the Plaquemines LNG project, impacting the percentage of completion accounting.
Company Guidance
During KBR's fourth quarter and full year 2024 earnings call, the company reported strong financial performance, exceeding expectations with $2.1 billion in Q4 revenue, contributing to a total of $7.7 billion for the year, reflecting growth rates of 23% for the quarter and 11% for the year. KBR achieved an adjusted EBITDA of $228 million for Q4 and $870 million for the full year, maintaining a margin of 11.2%. The company highlighted significant contributions from its Government Solutions and Sustainable Technology Solutions segments, with the latter delivering a 21.3% EBITDA margin for the year. KBR also discussed its strategic acquisition of LinQuest, which added $400 million to its 2025 revenue outlook, and the ramp-up of the HomeSafe program, anticipated to contribute $300 million to $500 million. Looking forward, KBR issued a 2025 financial outlook projecting 15% revenue growth at the midpoint, with adjusted EBITDA expected to range between $950 million and $990 million.KBR Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
KBR Realigns Business Segments and Appoints New Executives
Positive
Jan 8, 2025
KBR announced a strategic realignment of its business segments and executive appointments to enhance growth and streamline operations. The Government Solutions segment has been renamed Mission Technology Solutions, reflecting its focus on mission-critical capabilities in space, defense, and national security. Key executive changes include Byron Bright’s appointment as Chief Operating Officer and Stuart Bradie’s future role as Chair following the retirement of General Lester L. Lyles. These changes aim to improve operational efficiency, align capabilities with customer needs, and drive shareholder value. The company reiterated its 2027 financial targets and highlighted the anticipated benefits of its structural changes to capture global demand.
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.