Karman Holdings Inc. Common Stock (KRMN)

FairStock Score: 30/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a Buffett/Graham-style investor, I look for a durable business bought at a sensible price. Karman operates in an attractive area—mission-critical systems for hypersonics, missile defense, space and launch—and the top-line momentum is real: revenue was $182.1 million in fiscal Q2 2026, the quarter ended 2026-06-30, up from $115.1 million in fiscal Q2 2025, the quarter ended 2025-06-30, while net income rose to $14.0 million from $6.8 million. For FY2025, the period ended 2025-12-31, revenue was $471.5 million and net income $17.4 million, up from $345.3 million and $12.7 million in FY2024, the period ended 2024-12-31. That is a respectable turnaround from FY2023, the period ended 2023-12-31, when net income was $4.4 million. But quality metrics are mixed. FairStock shows ROE of 9.50%, ROCE of 5.14%, and debt-to-equity of 2.08; those are not the high-return, low-leverage characteristics I favor. Trailing free cash flow is negative $27.7 million, so earnings are not yet converting into owner cash. The balance sheet has an Altman Z-score of 2.81, a gray area, and a Piotroski F-score of 6/9. Valuation is the biggest hurdle: at the 2026-10-13 close of $30.15, FairStock calculates a P/E of 111.67, P/B of 9.48, EV/EBITDA of 30.52, and a Graham Number of just $4.40. The Lynch category is TURNAROUND, which fits the recent profit history. I would want much stronger returns on capital and positive free cash flow before paying such a premium. Growth is impressive; the margin of safety is not.

In plain English: Karman makes mission-critical parts for rockets and missile-defense systems, including payload protection, interstage structures, and propulsion. Sales and profit are growing quickly, but the company carries a lot of debt and has been using cash rather than generating it. At the recent close, the shares look expensive compared with the company's current profits and assets.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer