Karman Holdings Inc. (KRMN) AI Stock Analysis

Compare

122 Followers

Top Page

Karman Holdings Inc.

(NYSE:KRMN)

Rating:65Neutral

Price Target:―

Karman Holdings Inc. has a strong financial performance driven by revenue growth and operational efficiency. However, high leverage and negative equity are significant risks. Technical indicators show positive momentum, while recent strategic corporate events and a successful IPO enhance future growth prospects. Limited valuation data constrains a comprehensive assessment.

Positive Factors

Acquisitions

Karman's recent acquisition of ISP further strengthens its loitering missile launch content.

Defense Initiatives

Karman is positioned to benefit from the Department of Defense's investment in drone platforms, providing key components for significant systems.

Negative Factors

Budget Cuts

Concerns were raised about NASA budget cuts affecting the company.

Tariffs

Tariffs are a point of concern for Karman Holdings Inc.

Karman Holdings Inc. (KRMN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$5.84B

Dividend YieldN/A

Average Volume (3M)718.32K

Price to Earnings (P/E)―

Beta (1Y)1.73

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,113

SectorIndustrials

Sector Strength88

IndustryAerospace & Defense

Share Statistics

EPS (TTM)-0.04

Shares Outstanding132,174,590

10 Day Avg. Volume709,334

30 Day Avg. Volume718,315

Financial Highlights & Ratios

PEG Ratio0.00

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio-173.31

Enterprise Value/Market Cap0.87

Enterprise Value/Revenue14.19

Enterprise Value/Gross Profit75.08

Enterprise Value/Ebitda58.56

Forecast

1Y Price Target

$38.67

Price 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. 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. 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

Positive

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.

Balance Sheet

Negative

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.

Cash Flow

Positive

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.

TTM	Dec 2024	Dec 2023	Dec 2022
Breakdown
Income Statement		Total Revenue
191.36M	345.25M	280.71M	226.31M
	Gross Profit
67.98M	132.11M	105.55M	80.95M
	EBIT
24.34M	63.56M	48.49M	20.43M
	EBITDA
42.72M	96.36M	75.67M	55.42M
	Net Income Common Stockholders
-3.12M	12.70M	4.36M	-14.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
113.68M	11.53M	5.45M	6.63M
	Total Assets
875.39M	773.96M	710.83M	682.59M
	Total Debt
419.67M	447.87M	409.33M	403.58M
	Net Debt
305.99M	436.34M	403.88M	396.95M
	Total Liabilities
526.48M	577.96M	528.37M	505.00M
	Stockholders Equity
348.92M	196.00M	0.00	0.00
Cash Flow		Free Cash Flow
-15.18M	11.39M	3.55M	-27.16M
	Operating Cash Flow
-6.03M	26.65M	20.33M	-5.89M
	Investing Cash Flow
-15.30M	-46.24M	-16.21M	-21.26M
	Financing Cash Flow
127.34M	25.67M	-5.29M	16.73M

Karman Holdings Inc. Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FSS	78 Outperform	$6.14B	29.49	18.78%	0.56%	7.85%	15.78%
GTES	77 Outperform	$5.70B	26.80	6.93%	―	-4.01%	-8.86%
KTOS	74 Outperform	$6.03B	311.16	1.45%	―	7.32%	―
BE	73 Outperform	$5.02B	―	0.86%	―	20.95%	―
GXO	71 Outperform	$5.04B	71.13	2.61%	―	23.40%	-55.55%
Sector *	66 Neutral	$4.51B	12.29	5.40%	3.67%	4.15%	-12.21%
KRMN	65 Neutral	$5.84B	―		―	―	―

* Industrials Sector Average

Performance Comparison

KRMN

Karman Holdings Inc.

45.99

13.99

43.72%

FSS

Federal Signal

101.21

15.57

18.18%

KTOS

Kratos Defense

40.40

19.94

97.46%

GTES

Gates Industrial

22.16

5.54

33.33%

Bloom Energy

22.53

7.22

47.16%

GXO

GXO Logistics

43.64

-6.64

-13.21%

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

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.