Karman (NYSE:KRMN) Announces Quarterly Earnings Results, Beats Estimates By $0.01 EPS

Karman (NYSE:KRMN) posted its quarterly earnings results on Thursday. The company reported $0.14 earnings per share for the quarter, beating analysts’ consensus estimates of $0.13 by $0.01, FiscalAI reports. Karman had a return on equity of 15.89% and a net margin of 6.31%.The firm had revenue of $182.06 million during the quarter. During the same quarter in the prior year, the business earned $0.10 earnings per share. The firm’s revenue for the quarter was up 58.2% compared to the same quarter last year.

Here are the key takeaways from Karman’s conference call:

• Record second-quarter performance: Revenue rose 58% year over year to $182 million, adjusted EBITDA increased 55% to $55 million, and backlog reached a record $1.3 billion. Bookings approached $500 million, providing management with 95% visibility to the midpoint of its 2026 revenue guidance.
• 2026 outlook raised: Karman now expects revenue of $730 million-$745 million and adjusted EBITDA of $215 million-$222.5 million, excluding the pending Walker Precision Engineering acquisition. Management reaffirmed expectations for at least 25% organic growth in 2026 and 20%-25% annual organic growth for the foreseeable future.
• Strong defense demand and growth opportunities: Demand for missiles, interceptors, munitions, unmanned systems, and submarine programs remains elevated, with some customers discussing production increases of up to 10 times current levels. Karman is also pursuing second-source positions and expects three additional contingent agreements to potentially convert into firm contracts by year-end.
• Capacity and strategic expansion: The company is building a 200,000-square-foot Salt Lake City facility, expanding production in Gulfport, and agreed to acquire Walker Precision Engineering for approximately $94 million to establish a European defense presence. Karman also repriced its term loan, lowering interest expense by about $4 million annually.
• Cash conversion and execution risks remain: Operations used $4 million of cash in the first half as receivables, contract assets, and capital expenditures rose alongside growth; management expects only $15 million-$20 million of free cash flow in the second half. Net leverage was approximately 3.7 times adjusted EBITDA, while remediation of a previously disclosed material weakness is not expected to be fully tested until early 2027.

Karman Stock Performance

Shares of NYSE KRMN traded up $3.61 during midday trading on Friday, hitting $58.75. The company’s stock had a trading volume of 5,055,942 shares, compared to its average volume of 3,892,155. The stock has a fifty day moving average price of $49.86 and a 200 day moving average price of $73.14. The firm has a market capitalization of $7.79 billion, a price-to-earnings ratio of 202.59 and a beta of 0.55. Karman has a one year low of $43.68 and a one year high of $118.38. The company has a current ratio of 3.53, a quick ratio of 3.38 and a debt-to-equity ratio of 2.08.

Wall Street Analyst Weigh In

KRMN has been the subject of several recent analyst reports. Evercore set a $100.00 target price on shares of Karman in a research note on Wednesday, May 13th. BWS Financial reiterated a “sell” rating and set a $37.00 target price on shares of Karman in a research report on Monday, May 18th. Truist Financial upgraded shares of Karman to a “strong-buy” rating in a research report on Friday, May 1st. Citigroup decreased their target price on Karman from $97.00 to $76.00 and set a “buy” rating on the stock in a research report on Wednesday, July 1st. Finally, Piper Sandler lowered their price target on shares of Karman from $127.00 to $114.00 and set an “overweight” rating for the company in a report on Tuesday, May 19th. Two investment analysts have rated the stock with a Strong Buy rating, seven have assigned a Buy rating, one has issued a Hold rating and one has assigned a Sell rating to the company’s stock. According to data from MarketBeat, Karman presently has a consensus rating of “Moderate Buy” and a consensus price target of $97.50.

Karman News Roundup

Here are the key news stories impacting Karman this week:

• Positive Sentiment: Q2 earnings beat expectations: Karman reported adjusted earnings of $0.14 per share versus the $0.13 consensus estimate, compared with $0.10 a year earlier. Revenue reached approximately $182.1 million, a 58.2% year-over-year increase. Karman Q2 Earnings and Revenues Top Estimates
• Positive Sentiment: Profitability improved substantially: Gross profit rose to $78.2 million and operating profit to $34.8 million. Net income attributable to common shareholders more than doubled to $14.0 million, while diluted EPS increased 120% year over year to $0.11. Cash increased to $51.7 million and total liabilities declined. Karman Stock Rises on Q2 2026 Earnings
• Positive Sentiment: Full-year revenue outlook is broadly in line with expectations: Karman issued fiscal 2026 revenue guidance of $730 million to $745 million, compared with the consensus estimate of $731.4 million. Karman Space and Defense Q2 Results
• Positive Sentiment: Needham retained a Buy rating: Although the firm reduced its price target from $125 to $80, the new target still implies substantial upside from the referenced share price, providing continued analyst support. Benzinga analyst update
• Positive Sentiment: Financing costs may decline: Karman amended its credit agreement to refinance debt and lower interest expenses, which could support future earnings and cash flow. Karman Refinances Credit Agreement
• Negative Sentiment: Target reduction signals valuation concerns: Needham’s cut from $125 to $80 indicates a more cautious view on valuation or near-term upside, even though the firm remains constructive on the stock.

Institutional Trading of Karman

Several institutional investors and hedge funds have recently made changes to their positions in KRMN. EverSource Wealth Advisors LLC increased its stake in shares of Karman by 889.7% in the fourth quarter. EverSource Wealth Advisors LLC now owns 386 shares of the company’s stock worth $28,000 after buying an additional 347 shares during the period. CX Institutional purchased a new stake in shares of Karman in the 2nd quarter worth about $28,000. Towarzystwo Funduszy Inwestycyjnych PZU SA bought a new position in shares of Karman during the third quarter valued at approximately $29,000. Huntington National Bank bought a new position in Karman during the 4th quarter valued at approximately $32,000. Finally, Kestra Advisory Services LLC bought a new position in shares of Karman during the fourth quarter valued at $32,000.

About Karman

We specialize in the upfront design, testing, manufacturing, and sale of mission-critical systems for existing and emerging missile and defense, and space programs. Our integrated payload protection, propulsion, and interstage system solutions are deployed across a wide variety of existing and emerging programs supporting important Department of Defense (“DoD”) and space sector initiatives. We estimate that no single program accounted for more than 10% of sales for the nine months ended September 30, 2024 or the twelve months ended December 31, 2023, with revenue from over 100 active programs supporting current production and next-generation space, missile, hypersonic, and defense applications.