Karman Holdings Inc.
KRMN
$41.45
-9.04%
Karman Holdings Inc. is a specialty aerospace and defense company that designs, tests, and manufactures mission-critical systems for missile, defense, and space programs, including payload protection, propulsion, and interstage systems. The company has carved out a distinct niche as a supplier to high-priority Department of Defense initiatives such as hypersonics and strategic missile defense, positioning itself as a key enabler of next-generation defense capabilities. The current investor narrative centers on the company's strong growth trajectory—underpinned by a record backlog and raised guidance—contrasted with a sharp recent stock price decline, which has sparked debate about whether the selloff presents a compelling entry point or signals deeper concerns about valuation and execution.…
KRMN
Karman Holdings Inc.
$41.45
Related headlines
Investment Opinion: Should I buy KRMN Today?
Rating: Hold. The stock is a high-growth, high-risk opportunity with a compelling long-term story but significant near-term headwinds. Analyst consensus is Buy with an average target of $87.10, implying 91% upside, but the wide target range and recent price action warrant caution. The thesis is that Karman's growth and backlog justify a premium valuation, but the current price may not be the optimal entry point.
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KRMN 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced view. The company's growth and backlog are strong, but the valuation and financial risks temper enthusiasm. The stock could go either way depending on execution and market conditions. Upgrades to bullish if the company achieves positive free cash flow and maintains growth above 40%, while downgrades to bearish if growth falls below 20% or debt levels increase.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Karman Holdings Inc.'s 12-month outlook, with a consensus price target around $87.10 and implied upside of +110.1% versus the current price.
Average Target
$87.10
0 analysts
Implied Upside
+110.1%
vs. current price
Analyst Count
—
covering this stock
Price Range
$37 - $135
Analyst target range
The analyst target range is wide, from a low of $37.00 to a high of $135.00, reflecting a spread of $98.00, which indicates high uncertainty about the stock's future. The high target of $135.00 implies a potential upside of +196% from the current price, suggesting that some analysts see significant value in the company's growth prospects and the potential for multiple expansion as earnings scale. The low target of $37.00 implies a downside of -18.8%, which could be based on concerns about valuation, execution risks, or a potential slowdown in defense spending. Recent institutional ratings have been mostly positive, with Citigroup, KeyBanc, Piper Sandler, Evercore ISI, and Needham all maintaining Buy/Overweight ratings, while BWS Financial has maintained a Sell rating. The wide target spread and the presence of a Sell rating indicate that while the consensus is bullish, there is meaningful disagreement about the stock's fair value, which is typical for a high-growth, high-valuation stock in a volatile sector.
Bulls vs Bears: KRMN Investment Factors
Karman presents a classic high-growth, high-risk investment. The bull case is compelling: 51% revenue growth, a $1B backlog, improving margins, and a strategic position in defense. However, the bear case is equally strong: extreme valuation (562x trailing PE), negative free cash flow, high debt, and a stock in a steep downtrend. Currently, the bearish evidence is more immediate, given the 48% six-month decline and valuation concerns, but the long-term growth story is intact. The key tension is whether the market will reward the growth with multiple expansion or continue to de-rate the stock due to valuation and execution risks. The resolution of this tension will determine the stock's direction over the next 12 months.
Bullish
- Explosive Revenue Growth: Q1 2026 revenue surged 51% YoY to $151.2M, with sequential acceleration from $100.1M in Q1 2025. This growth is driven by strong demand across hypersonics, missile defense, and space, underpinned by a record $1B backlog.
- Record Backlog Provides Visibility: The $1B backlog, reported in recent news, offers multi-year revenue visibility, reducing execution risk. This supports the company's raised guidance and gives confidence in sustaining high growth rates.
- Improving Profitability: Gross margin expanded to 42.2% in Q1 2026 from 39.4% a year ago, while operating margin improved to 14.2% from 10.0%. Net income turned positive at $7.8M, marking a clear inflection point.
- Analyst Consensus is Buy: With a mean rating of 1.64 (Buy) and an average target of $87.10, analysts see ~91% upside from the current price. Five major firms (Citigroup, KeyBanc, Piper Sandler, Evercore, Needham) maintain Buy/Overweight ratings.
Bearish
- Extreme Valuation Premium: Trailing PE is 562.8x and forward PE is 48.6x, far above industry norms. Even with strong growth, the market is pricing in perfection, leaving no room for error.
- Sharp Price Decline: The stock has fallen 48.3% over six months and 61.5% from its 52-week high of $118.38. This downtrend suggests waning investor confidence and potential further downside.
- Negative Free Cash Flow: TTM free cash flow is -$31.0M, indicating the company is burning cash despite reported profits. This could strain liquidity if growth slows or capital needs rise.
- High Debt Levels: Debt-to-equity ratio is 1.53, indicating significant leverage. Interest expenses of $12.6M in Q1 2026 consume a large portion of operating income, increasing financial risk.
KRMN Technical Analysis
Karman's stock is in a pronounced downtrend, with the price at $45.57 as of August 28, 2026, reflecting a 1-year decline of -17.8% and a 6-month plunge of -48.3%. The current price sits at only 38.5% of its 52-week range (between $43.68 and $118.38), indicating the stock is trading near its lows, which often suggests either a value opportunity or a falling knife. The stock has been unable to sustain any meaningful recovery, and the 52-week high of $118.38 is a distant memory, with the price now 61.5% below that peak.
Beta
—
—
Max Drawdown
-64.0%
Largest decline past year
52-Week Range
$41-$118
Price range past year
Annual Return
-22.4%
Cumulative gain past year
| Period | KRMN Return | S&P 500 |
|---|---|---|
| 1m | -13.9% | +2.7% |
| 3m | -24.2% | +1.0% |
| 6m | -58.1% | +12.0% |
| 1y | -22.4% | +18.9% |
| ytd | -46.1% | +12.5% |
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KRMN Fundamental Analysis
Karman's revenue is growing rapidly, with the most recent quarter (Q1 2026) reporting revenue of $151.2 million, a 51.0% year-over-year increase. This growth is accelerating, as revenue has climbed sequentially from $100.1 million in Q1 2025 to $115.1 million in Q2 2025, $121.8 million in Q3 2025, $134.5 million in Q4 2025, and now $151.2 million in Q1 2026, representing a 51% YoY growth rate. The company's growth is driven by strong demand across its three core end markets—hypersonics, missile defense, and space—with a record backlog of $1 billion reported in recent news, which provides strong visibility into future revenue. This growth trajectory is a key pillar of the investment thesis, as the company is capitalizing on elevated global defense spending and the increasing importance of advanced missile and space systems.
Quarterly Revenue
$151210000.0B
2026-03
Revenue YoY Growth
+51.0%
YoY Comparison
Gross Margin
42.2%
Latest Quarter
Free Cash Flow
$-30995000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
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Valuation Analysis: Is KRMN Overvalued?
Given that Karman is profitable (net income of $7.8 million in Q1 2026), the PE ratio is the most appropriate valuation metric. The trailing PE stands at 562.8x, while the forward PE is 48.6x, indicating that the market expects significant earnings growth in the coming year. The wide gap between trailing and forward PE suggests that the market is pricing in a substantial earnings ramp, which is consistent with the company's rapid revenue growth and improving margins. However, the absolute level of the trailing PE is extremely high, reflecting the market's optimism about future profitability, but also leaving little room for error.
PE
562.8x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 211x~439x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
85.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are substantial. The company's debt-to-equity ratio of 1.53 indicates high leverage, and interest expenses of $12.6M in Q1 2026 consumed over half of operating income. Negative free cash flow of -$31M TTM suggests the company is not yet self-funding, which could lead to dilution or increased debt if growth stalls. The extreme trailing PE of 562.8x leaves no margin for error; any earnings miss could trigger a severe de-rating. Additionally, the net margin of 3.7% is thin, making profitability sensitive to cost overruns or pricing pressures.