GET DAILY SIGNALSKarman Holdings (KRMN) Posts Strong Q3 Growth and Raises Full-Year Outlook
Key Takeaways
- Revenue reached $201.6 million in the third quarter of fiscal 2026, up 65.6% year over year and above Wall Street expectations.
- Adjusted (non-GAAP) earnings per share came in at $0.19, beating the $0.15 consensus estimate by $0.04.
- GAAP net income climbed 174% year over year to roughly $21 million, a quarterly record.
- Backlog surged to $1.7 billion, more than double the level at the end of fiscal 2025, supported by a seven-year defense contract tied to the THAAD (Terminal High Altitude Area Defense) program.
- Management raised full-year 2026 revenue guidance to $755 million to $760 million and adjusted EBITDA guidance to $225 million to $227 million.
Earnings Context and Why It Matters
Karman Holdings (NYSE: KRMN), through its Karman Space & Defense subsidiary, designs and manufactures mission-critical subsystems for missiles, space, hypersonics, and launch vehicles. The company's quarterly results matter because they offer a direct read on defense spending priorities, including interceptor production, tactical missiles, and submarine programs. Karman has delivered rapid growth through a mix of organic expansion and acquisitions, and investors are closely watching whether that momentum can be sustained while the company manages rising debt and working capital needs. With backlog now more than double year-end levels, this report provides important evidence on the durability of demand and the company's ability to convert contract wins into profitable, cash-generating revenue. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
Reported Results
Karman reported third-quarter fiscal 2026 revenue of $201.6 million, up 65.6% from $121.8 million a year earlier and ahead of the consensus estimate of roughly $194.7 million. Organic revenue growth was approximately 25%, consistent with the company's 20% to 25% annual target, while acquisitions contributed the balance of the increase.
Gross profit rose about 73% to $86 million, and gross margin improved to 42.7% from 41.0% a year ago. GAAP net income grew 174% to approximately $21 million, translating to GAAP diluted EPS (earnings per share) of $0.16, compared with $0.06 in the prior-year quarter. On an adjusted (non-GAAP) basis, which excludes certain acquisition-related and financing items, EPS reached $0.19, beating the $0.15 consensus by $0.04.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 60% to about $61 million, with an adjusted EBITDA margin of roughly 30%. Total backlog climbed to $1.7 billion, up 108% from the end of fiscal 2025, while quarterly bookings approached $465 million. Free cash flow turned positive at approximately $13 million for the quarter.
By segment, Tactical Missiles and Integrated Defense Systems revenue rose about 52% to $67.6 million, Hypersonics and Strategic Missile Defense grew roughly 40% to $51.1 million, and Maritime Defense Systems contributed $45.0 million. Space and Launch revenue declined about 7% to $37.9 million, reflecting a shift in launch schedule timing. From what I see, the margin expansion here stands out as a positive signal.
Market Reaction and Investor Sentiment
Karman's results exceeded consensus on both the top and bottom lines, and the raised full-year guidance came in ahead of the consensus revenue forecast of roughly $742 million. Historically, the stock has shown notable post-earnings volatility, and investors entered this report focused on backlog conversion, cash generation, and margin trajectory. The combination of record bookings, a larger backlog, and positive free cash flow is likely to be viewed constructively, though sentiment may remain tempered by the company's elevated leverage and the modest year-over-year decline in adjusted EBITDA margin as acquisition-related and general and administrative costs rise. I'm watching this closely for signs of sustained execution.
Forward Outlook and Key Factors to Monitor
Management raised its fiscal 2026 outlook to revenue of $755 million to $760 million and adjusted EBITDA of $225 million to $227 million, implying roughly 61% revenue growth at the midpoint. The company reiterated its expectation for 20% to 25% annual organic growth and adjusted EBITDA margins of about 30%.
Investors will want to monitor several factors in the coming quarters. First, backlog conversion will be critical, given the natural lag between contract awards, revenue recognition, and cash collection. Second, the integration of recent acquisitions, including the completed Walker Precision Holdings deal, will influence both growth and operating costs.
Balance sheet strength also deserves attention, as long-term debt increased materially during the period, pushing net interest expense higher. Finally, the timing of space and launch program deliveries, along with the pace of new long-term agreements and second-source opportunities in the defense supply chain, will shape the revenue trajectory into fiscal 2027.
Exploring Tickeron’s AI Tools in My Research
In preparing this analysis, I turned to Tickeron’s AI Screener to quickly compare KRMN against peers in the aerospace and defense space. The tool helped surface relevant technical patterns and fundamentals without hours of manual work, giving me a clearer view of how this name fits into broader sector trends. It is a practical addition to the workflow when tracking names with complex contract backlogs and acquisition-driven growth.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
KRMN in +10.50% Uptrend, growing for three consecutive days on October 29, 2026
Moving higher for three straight days is viewed as a bullish sign. Keep an eye on this stock for future growth. Considering data from situations where KRMN advanced for three days, in 98 of 106 cases, the price rose further within the following month. The odds of a continued upward trend are 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The 10-day moving average for KRMN crossed bullishly above the 50-day moving average on November 02, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 2 of 3 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 67%.
Bearish Trend Analysis
The 10-day RSI Indicator for KRMN moved out of overbought territory on October 30, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 14 similar instances where the indicator moved out of overbought territory. In 10 of the 14 cases, the stock moved lower in the following days. This puts the odds of a move lower at 71%.
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In 14 of 24 cases where KRMN's Stochastic Oscillator exited the overbought zone, the price fell further within the following month. The odds of a continued downward trend are 58%.
The Momentum Indicator moved below the 0 level on November 04, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on KRMN as a result. In 17 of 25 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 68%.
KRMN moved below its 50-day moving average on November 04, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KRMN declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
KRMN broke above its upper Bollinger Band on October 29, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for KRMN entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Price Growth Rating for this company is 63 (best 1 - 100 worst), indicating steady price growth. KRMN’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 72 (best 1 - 100 worst), indicating slightly better than average sales and a considerably profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 90 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (10.754) is normal, around the industry mean (5.045). KRMN has a moderately high P/E Ratio (126.556) as compared to the industry average of (17.993). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (3.110). Dividend Yield (0.000) settles around the average of (0.058) among similar stocks. P/S Ratio (8.299) is also within normal values, averaging (18.367).
The Tickeron PE Growth Rating for this company is 97 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KRMN’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 78, placing this stock worse than average.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
Industry AerospaceDefense
Advertisement