Karman Holdings Inc. (NYSE: KRMN)

Sector: Industrials Industry: Aerospace & Defense CIK: 0002040127
Market Cap 15.05 Bn
P/B 40.78
P/E 1,327.75
P/S 35.15
ROIC (Qtr) 5.02
Div Yield % 0.00
Rev 1y % (Qtr) 41.67
Total Debt (Qtr) 483.69 Mn
Debt/Equity (Qtr) 1.31

About

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 18.66M provide 2.12x coverage of short-term debt 8.79M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 7.53M provides strong 30.25x coverage of stock compensation 248887, indicating sustainable incentive practices.
  • Tangible assets of 421.11M provide exceptional 22.41x coverage of deferred revenue 18.79M, showing strong service capability backing.
  • Tangible assets of 421.11M provide robust 8.48x coverage of other current liabilities 49.68M, indicating strong asset backing.
  • Cash reserves of 18.66M provide solid 1.32x coverage of other non-current liabilities 14.14M, indicating strong liquidity.

Bear case

  • Operating cash flow of 7.53M barely covers its investment activities of (4.41M), with a coverage ratio of -1.71, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 18.66M provide limited coverage of acquisition spending of (581841), which is -32.08x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 7.53M provides insufficient coverage of deferred revenue obligations of 18.79M, which is 0.40x, raising concerns about future service delivery capabilities.
  • High receivables of 70.18M relative to inventory of 15.38M (4.56 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of 7.53M provides minimal 0.78x coverage of tax expenses of 9.60M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Aerospace & Defense
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GE General Electric Co 342.94 Bn 42.54 7.80 20.84 Bn
2 RTX RTX Corp 252.05 Bn 38.24 2.93 40.71 Bn
3 BA Boeing Co 174.43 Bn -17.16 2.16 53.35 Bn
4 LMT Lockheed Martin Corp 126.61 Bn 30.15 1.73 22.19 Bn
5 GD General Dynamics Corp 95.62 Bn 22.69 1.86 8.01 Bn
6 NOC Northrop Grumman Corp /De/ 89.30 Bn 22.22 2.18 16.96 Bn
7 HWM Howmet Aerospace Inc. 88.16 Bn 60.80 11.05 3.19 Bn
8 TDG TransDigm Group INC 80.97 Bn 43.39 9.17 30.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 16.02 3.58
EV to Cash from Ops. EV/CFO 2,060.35 58.38
EV to Debt EV to Debt 32.07 98.04
EV to EBIT EV/EBIT 231.67 19.42
EV to EBITDA EV/EBITDA 206.01 33.60
EV to Free Cash Flow [EV/FCF] EV/FCF 4,185.76 91.66
EV to Market Cap EV to Market Cap 1.03 1.13
EV to Revenue EV/Rev 36.22 11.27
Price to Book Value [P/B] P/B 40.78 4.81
Price to Earnings [P/E] P/E 1,327.75 31.79
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.75
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 22.95
Dividend per Basic Share Div per Share (Qtr) 0.00 0.70
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 14.15
Interest Coverage Int. cover (Qtr) 1.46 -18.00
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 68.36 -50.32
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 143.31 1,609.43
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.75
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -50.99 -30.98
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 7.12 10.65
EBIT Growth (1y) % EBIT 1y % (Qtr) 3.82 -26.90
EBT Growth (1y) % EBT 1y % (Qtr) 52.77 -27.25
EPS Growth (1y) % EPS 1y % (Qtr) -20.00 -99.21
FCF Growth (1y) % FCF 1y % (Qtr) 174.94 6.61
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 34.32 -5.55
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.44 0.51
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 0.20 1.76
Current Ratio Curr Ratio (Qtr) 2.86 3.72
Debt to Equity Ratio Debt/Equity (Qtr) 1.31 0.07
Interest Cover Ratio Int Coverage (Qtr) 1.46 -18.00
Times Interest Earned Times Interest Earned (Qtr) 1.46 -18.00
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 17.70 -345.84
EBIT Margin % EBIT Margin % (Qtr) 15.63 -382.63
EBT Margin % EBT Margin % (Qtr) 4.89 -387.93
Gross Margin % Gross Margin % (Qtr) 40.00 -33.31
Net Profit Margin % Net Margin % (Qtr) 2.60 -389.13