KBR Inc. Common Stock (KBR)

FairStock Score: 68/100 — STEADY

Key Financials

Strengths

• Generates $298 million in annual free cash flow (6.7% yield on market cap)
• High return on equity of 30.8% demonstrating efficient capital deployment
• Established organization with 36,000 employees providing operational scale

Concerns

• Revenue declining at 11.2% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 1.3 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

KBR Inc. Common Stock is a small-cap industrials company valued at $4.5 billion. The business generates $7.8 billion in annual revenue with a 1.4% net margin and $298 million in free cash flow. From a quality standpoint, KBR shows distressed Altman Z-Score of 1.3 warrants caution and strong 31% ROE. On valuation, the stock is attractively valued at 10.1x earnings, with trades above its Graham Number with a negative 15% margin. Growth dynamics show revenue growing at -11.2% and profit growth of 46.0%. The 1.8% dividend yield adds an income component for patient holders. Our composite FairStock Score of 68/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

The market underappreciates KBR's consistent 31% ROE at just 10x earnings—a re-rating toward sector peers could unlock 30-50% upside. With $298 million in annual free cash flow (6.7% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer