KBR (KBR) AI Stock Analysis

• Market Cap: $5.37B
• Dividend Yield: 1.65%
• Average Volume (3M): 1.36M
• Price to Earnings (P/E): 14.2
• Beta (1Y): 0.84
• Revenue Growth: 9.66%
• EPS Growth: 29.01%
• Country: US
• Employees: 38,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 1.02
• Shares Outstanding: 126,989,630
• 10 Day Avg. Volume: 1,171,294
• 30 Day Avg. Volume: 1,364,159
• PEG Ratio: -0.09
• Price to Book (P/B): 5.44
• Price to Sales (P/S): 1.02
• P/FCF Ratio: 20.54
• Enterprise Value/Market Cap: 1.56
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 7.28
• Enterprise Value/Ebitda: 9.39
• 1Y Price Target: $53.67
• Price Target Upside: 22.84% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $49.00 ▲(12.15% Upside)

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 Business Overview & Revenue Model

Company Description

KBR, 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 Money

KBR 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 Financial Statement Overview

Summary

KBR demonstrates strong operational efficiency and cash flow management, with a robust free cash flow growth rate of 10.64%. However, concerns arise from a high debt-to-equity ratio of 1.95 and a decline in revenue growth by 19.8% TTM. The company shows effective use of equity with a strong ROE of 26.11%.

Income Statement

KBR's income statement shows a solid gross profit margin of approximately 14.28% for TTM, indicating efficient cost management. However, the net profit margin is relatively low at 4.71%, suggesting room for improvement in profitability. The revenue growth rate has declined by 19.8% in the TTM, which is a concern, but historical data shows periods of positive growth. The EBIT and EBITDA margins are healthy, reflecting good operational efficiency.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.95, indicating significant leverage, which could pose risks if not managed carefully. However, the return on equity is strong at 26.11%, showing effective use of equity to generate profits. The equity ratio stands at 22.02%, suggesting a moderate level of financial stability.

Cash Flow

KBR's cash flow statement is robust, with a free cash flow growth rate of 10.64% in the TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.31, and the free cash flow to net income ratio is 0.91, both reflecting efficient cash flow management relative to earnings.

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: Neutral
• Last Price: 43.69
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KBR, the sentiment is Neutral. The current price of 43.69 is above the 20-day moving average (MA) of 41.82, above the 50-day MA of 41.89, and below the 200-day MA of 47.38, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 52.89 is Neutral, neither overbought nor oversold. The STOCH value of 83.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KBR.

KBR Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRIM	75 Outperform	$6.93B	24.67	18.56%	0.25%	21.45%	67.31%
KBR	73 Outperform	$5.37B	14.20	27.77%	1.65%	9.66%	29.01%
ACM	71 Outperform	$12.99B	23.47	27.29%	1.06%	0.21%	53.80%
J	71 Outperform	$16.15B	58.14	7.67%	0.94%	-23.00%	-61.88%
MTZ	66 Neutral	$18.60B	52.08	11.18%	―	12.99%	274.10%
FLR	64 Neutral	$7.16B	2.21	91.03%	―	-1.81%	1228.51%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%