KBR (KBR) AI Stock Analysis

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KBR

(NYSE:KBR)

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Outperform 73 (OpenAI - 4o)

Rating:73Outperform

Price Target:

$49.00

▲(20.07% Upside)

Action:UpgradedDate:12/09/25

KBR's overall stock score reflects strong earnings call results and a strategic spin-off plan, which are the most significant factors. The company's solid financial performance and reasonable valuation further support the score, while technical indicators suggest a positive short-term outlook. However, high leverage and revenue growth challenges remain as potential risks.

Positive Factors

Strong Cash Flow

Robust cash flow growth enhances KBR's ability to fund operations and investments, supporting long-term financial stability and strategic initiatives.

Strategic Spin-Off Plan

The spin-off plan aims to enhance strategic focus and operational independence, potentially unlocking shareholder value and improving business efficiency.

Significant Contract Wins

Winning large contracts strengthens KBR's market position and ensures a steady revenue stream, contributing to long-term growth and stability.

Negative Factors

High Leverage

Significant leverage can pose financial risks, limiting flexibility and increasing vulnerability to economic downturns, impacting long-term stability.

Revenue Growth Challenges

Flat revenue growth indicates potential difficulties in expanding market share, which could hinder long-term growth prospects and profitability.

NASA Budget Uncertainty

Budget uncertainties in key client sectors like NASA could affect KBR's revenue streams, posing risks to its business segments reliant on government contracts.

KBR (KBR) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.13B

Dividend Yield1.65%

Average Volume (3M)1.17M

Price to Earnings (P/E)13.1

Beta (1Y)0.88

Revenue Growth9.66%

EPS Growth29.01%

CountryUS

Employees38,000

SectorIndustrials

Sector Strength72

IndustryEngineering & Construction

Share Statistics

EPS (TTM)0.99

Shares Outstanding126,989,630

10 Day Avg. Volume1,117,559

30 Day Avg. Volume1,166,591

Financial Highlights & Ratios

PEG Ratio-0.09

Price to Book (P/B)5.44

Price to Sales (P/S)1.02

P/FCF Ratio20.54

Enterprise Value/Market Cap1.46

Enterprise Value/Revenue0.93

Enterprise Value/Gross Profit6.51

Enterprise Value/Ebitda8.39

Forecast

1Y Price Target

$56.50

Price Target Upside38.45% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

EPS Forecast (FY)4.07

Revenue Forecast (FY)$8.16B

KBR Business Overview & Revenue Model

Company DescriptionKBR, Inc. provides scientific, technology, and engineering solutions to governments and commercial customers worldwide. The company operates through Government Solutions and Sustainable Technology Solutions segments. The Government Solutions segment offers life-cycle support solutions to defense, intelligence, space, aviation, and other programs and missions for military and other government agencies in the United States, the United Kingdom, and Australia. Its services cover research and development, advanced prototyping, acquisition support, systems engineering, cyber analytics, space domain awareness, test and evaluation, systems integration and program management, global supply chain management, and operations readiness and support, as well as command, control, communications, computers, intelligence, surveillance, and reconnaissance services. This segment also provides various professional advisory services to deliver high-end systems engineering, systems assurance, and technology to customers across the defense, energy, and critical infrastructure sectors. The Sustainable Technology Solutions segment holds a portfolio of approximately 70 proprietary process technologies for ammonia/syngas/fertilizers, chemical/petrochemicals, clean refining, and circular process/circular economy solutions. This segment also includes advisory and consulting practices that focuses on energy transition and net-zero carbon emission consulting; and provides engineering, design, and professional services, as well as industrial solutions through KBR INSITE, a proprietary, digital, and cloud-based operations and maintenance platform that identifies opportunities for clients to achieve sustainable improvements in production, reliability, environment impact, energy efficiency, and profitability. KBR, Inc. was founded in 1998 and is headquartered in Houston, Texas.

How the Company Makes MoneyKBR generates revenue through multiple streams, primarily from its engineering and construction services, government services, and technology solutions. The company earns money by undertaking large-scale projects for clients, where it charges for its engineering and construction expertise, often on a fixed-price or cost-plus basis. Additionally, KBR provides consulting services and operational support for various sectors, which contribute significantly to its earnings. The company's partnerships with government agencies and private enterprises allow it to secure long-term contracts, ensuring a steady flow of revenue. Key factors contributing to its earnings include its ability to leverage advanced technologies, a strong focus on sustainability, and a diverse portfolio of projects across multiple sectors.

KBR Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsKBR's revenue in the United States shows a robust recovery, surpassing pre-2023 levels, driven by strategic positioning in defense and intelligence sectors. The Middle East also demonstrates growth, supported by new contracts like the Djibouti operations. However, Europe faces a downturn, reflecting broader economic challenges. Despite the termination of the HomeSafe contract impacting overall revenue guidance, KBR's strong pipeline and focus on key markets suggest resilience and potential for long-term growth, with a $9 billion revenue target by 2027.

Data provided by:

The Fly

KBR Earnings Call Summary

Earnings Call Date:Feb 26, 2026

(Q4-2025)

Next Earnings Date:May 05, 2026

Earnings Call Sentiment Positive

The call emphasizes disciplined execution and improving quality of earnings despite a challenging external award environment. Key positives include margin expansion (up ~100–190 bps), strong cash conversion (110%), backlog growth (STS +5% YoY, MTS +15% YoY), a robust bids pipeline, strategic M&A (SWAT) and on-track spin preparations. Lowlights include a Q4 revenue decline (-$223M), award timing/protest risks (material awards under protest), market pressure in petrochemical and green projects, and near-term spin transition costs ($140M–$180M). Given the balance of stronger profitability, cash generation, backlog/pipeline momentum and clear 2026 guidance that offsets several the near-term headwinds, the highlights materially outweigh the lowlights and the overall tone is constructive.

Q4-2025 Updates

Positive Updates

Industry-leading Safety Performance

TRIR reached an all-time low of 0.033 and Zero Harm days hit an all-time high of 96%, demonstrating strong safety culture and operational discipline.

Margin Expansion and Profitability Improvement

Adjusted EBITDA increased by $12M in Q4 and by $100M for the full year; adjusted margins rose to 12.6% in Q4 (up 190 basis points) and to 12.4% for FY2025 (up >100 basis points year-over-year).

Strong Cash Generation and Conversion

Operating cash flow was $557M for FY2025, representing 110% conversion to adjusted net income; adjusted operating cash flow guidance for 2026 is $560M–$600M.

Record Capital Returned to Shareholders and Deleveraging

Returned $413M to shareholders in 2025 (highest in a decade) and ended the year with net leverage of 2.2x, supporting disciplined capital allocation into the spin.

STS Backlog, Book-to-Bill and Pipeline Momentum

Sustainable Tech backlog ended at $4.2B (up 5% YoY and >20% excluding Plaquemines); Q4 book-to-bill was 1.6x with trailing 12-month book-to-bill 1.2x; near-term pipeline (ex-LNG) ~ $5B with ~80% repeat customers; work under contract covers ~63% of STS 2026 guidance.

Mission Tech Backlog and Bid Activity

Mission Tech backlog and options were $19.1B (up 15% YoY) with ~40% funded (ex-PFIs); bids awaiting awards totaled $17B (80% new business); expect to bid >$25B in 2026 (up double digits YoY); work under contract covers ~82% of MTS 2026 guidance.

Strategic M&A and Technology Progress

Closed SWAT acquisition (BRIS) which more than doubled that JV's EBITDA contribution; launched INSITE 3.0 venture with Applied and advanced technologies (Mura, Hydro-PRT now producing on-spec product), supporting long-term OpEx/digital growth.

Conservative, Clear 2026 Financial Guide

FY2026 consolidated guidance: revenues $7.9B–$8.36B, adjusted EBITDA $980M–$1.04B, adjusted EPS $3.87–$4.22 (midpoint implies ~4% YoY growth); assumes STS low double-digit growth at 20%+ margins and MTS low single-digit growth at 10%+ margins.

Negative Updates

Revenue Decline in Q4

Q4 revenues were $1.85B, down $223M year-over-year (primarily due to award timing in MTS and reductions in EUCOM contingency scope).

Challenging Market Environment for STS

Sharp decline in petrochemicals CapEx and a pause in many green projects as customers prioritized affordability and energy security, pressuring certain STS end markets in 2025.

Mission Tech Award Delays and Reduced Contingency Activity

MTS faced award timing delays, reduced contingency activity (notably in Europe) and impacts from the U.S. government shutdown; lost the COSMOS recompete (a lower-margin loss) and experienced some recompete/protest activity.

Protests, Pending Awards and Concentration Risk

Several material awards are under protest (e.g., Mission Iraq ~ $1B and a classified K2A program); guidance assumes resolution of protests in H1 2026, creating upside/downside risk depending on outcomes.

Near-term Transition and Spin Costs

Expected spin-related transition costs of $140M–$180M (including one-time IT capital), and leverage may trend modestly higher in H1 2026 before improving—creating near-term cash consumption.

Pressure in Science & Space and Specific Project Uncertainty

Science & Space revenues were pressured (NASA budget headwinds) and certain projects (e.g., Energy Transfer Lake Charles) were paused/cancelled, raising uncertainty about future JV contributions and project timing.

Higher Tax Rate and Interest Expense

Adjusted EPS improvement was partially offset by higher interest expense and a projected FY2026 effective tax rate of 26%–28% (up due to a greater mix of work in the Global South).

ERP/Implementation Execution Risk (managed but present)

ERP (Microsoft Dynamics) rollouts are underway across STS geographies; management highlighted disciplined execution to date, but ERP implementations historically represent execution risk during transformation.

Company Guidance

KBR provided consolidated fiscal‑2026 guidance of $7.90–$8.36 billion in revenues, $980–1,040 million of adjusted EBITDA, $3.87–4.22 adjusted EPS and $560–600 million of adjusted operating cash flow (midpoint implying ~4% y/y growth), with transition/spin costs of $140–180 million included; capital expenditures of $40–50 million; an effective tax rate of 26–28%; an estimated adjusted share count of 127 million; and a 2026 dividend of $0.66 per share ($0.165 quarterly). Management expects revenues/adjusted EPS to be ~46% H1 / 54% H2, Q1 roughly in line with Q4 ’25, and noted first‑half comps include elevated EUCOM contingency of ~$60–70 million per quarter; modeling assumptions include resolution of outstanding protests in H1, all material programs remaining in place, modest improvement in interest rates in H2 and stable FX. They also framed segment expectations: STS assumed to grow low double‑digits at normative margins of 20%+, MTS low single‑digits at 10%+ (work‑under‑contract already covers ~63% of STS’s 2026 guide and ~82% of MTS’s), and the company will introduce adjusted operating and free cash flow metrics that add back spin‑related cash outflows.

KBR Financial Statement Overview

Summary

KBR exhibits solid financial health with strong profitability and cash flow metrics. However, the high leverage and recent revenue decline present potential risks. The company needs to focus on revenue growth while managing its debt levels to ensure long-term stability.

Income Statement

Positive

KBR's income statement shows a mixed performance. The TTM data indicates a decline in revenue growth by 19.8%, which is concerning. However, the company maintains a healthy gross profit margin of 14.28% and an EBIT margin of 8.93%, indicating operational efficiency. The net profit margin is modest at 4.71%, reflecting stable profitability despite revenue challenges.

Balance Sheet

Neutral

The balance sheet reveals a high debt-to-equity ratio of 1.95, suggesting significant leverage, which could pose financial risks. However, the return on equity is strong at 26.11%, indicating effective use of equity to generate profits. The equity ratio is not explicitly calculated, but the company's equity position appears stable relative to its assets.

Cash Flow

Positive

KBR's cash flow statement is robust, with a notable free cash flow growth rate of 10.38% in the TTM period. The operating cash flow to net income ratio is 0.29, and the free cash flow to net income ratio is high at 0.91, indicating strong cash generation relative to earnings. This suggests good liquidity and the ability to fund operations and investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.06B	7.74B	6.96B	6.56B	7.34B	5.77B
Gross Profit	1.15B	1.10B	977.00M	828.00M	806.00M	666.00M
EBITDA	893.00M	811.00M	90.00M	508.00M	372.00M	173.00M
Net Income	380.00M	375.00M	-265.00M	190.00M	27.00M	-72.00M
Balance Sheet
Total Assets	6.65B	6.66B	5.57B	5.57B	6.20B	5.71B
Cash, Cash Equivalents and Short-Term Investments	539.00M	231.00M	304.00M	282.00M	254.00M	285.00M
Total Debt	2.85B	2.85B	2.06B	1.98B	2.12B	1.83B
Total Liabilities	5.18B	5.20B	4.17B	3.93B	4.52B	4.10B
Stockholders Equity	1.46B	1.45B	1.38B	1.62B	1.67B	1.58B
Cash Flow
Free Cash Flow	468.00M	385.00M	251.00M	325.00M	248.00M	347.00M
Operating Cash Flow	515.00M	462.00M	331.00M	396.00M	278.00M	367.00M
Investing Cash Flow	10.00M	-786.00M	-70.00M	40.00M	-428.00M	-877.00M
Financing Cash Flow	-441.00M	384.00M	-359.00M	-402.00M	87.00M	225.00M

KBR Technical Analysis

Technical Analysis Sentiment

Negative

Last Price40.81

Price Trends

50DMA

42.43

Negative

100DMA

42.72

Negative

200DMA

46.10

Negative

Market Momentum

MACD

-0.51

Positive

RSI

43.11

Neutral

STOCH

25.35

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 40.81 is below the 20-day moving average (MA) of 42.13, below the 50-day MA of 42.43, and below the 200-day MA of 46.10, indicating a bearish trend. The MACD of -0.51 indicates Positive momentum. The RSI at 43.11 is Neutral, neither overbought nor oversold. The STOCH value of 25.35 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 45 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 (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRIM	74 Outperform	$8.21B	30.28	17.79%	0.25%	21.45%	67.31%
KBR	73 Outperform	$5.13B	13.13	27.77%	1.65%	9.66%	29.01%
ACM	69 Neutral	$12.33B	21.88	27.11%	1.06%	0.21%	53.80%
J	66 Neutral	$15.80B	36.92	12.01%	0.94%	-23.00%	-61.88%
MTZ	66 Neutral	$22.70B	67.83	11.18%	―	12.99%	274.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLR	55 Neutral	$7.78B	-42.68	-1.42%	―	-1.81%	1228.51%

* Industrials Sector Average

Performance Comparison

KBR

40.81

-6.83

-14.34%

ACM

Aecom Technology

94.21

-2.07

-2.15%

FLR

Fluor

53.55

16.21

43.41%

Jacobs Solutions

133.45

9.41

7.59%

MTZ

MasTec

285.26

158.43

124.92%

PRIM

Primoris Services

153.20

81.70

114.28%

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.Date of analysis: Dec 09, 2025