Missile Specialist Posts Mixed Q4, Sees Rising Defense Demand

Karman posted mixed results for its Q4 report but hiked its sales forecast for the year. The defense contractor lifted its outlook amid surging demand for next-generation technologies. KRMN stock retreated from near a buy point Thursday.

Huntington Beach, Calif.-based Karman Holdings (KRMN) specializes in propulsion technology and payload protection deployment. The company — whose initial public offering launched in February 2025 — has contributed to more than 130 space and defense projects, including high-priority missile programs.

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Karman provides “tip to tail” designing, manufacturing and engineering for missiles, rockets and hypersonic vehicles. That includes payload and protection systems, hydro/aerodynamic interstage systems, and propulsion and launch systems. The company operates across three main segments: hypersonics and strategic missile defense, space and launch, and tactical missile and integrated defense systems.

Karman reported earnings of 11 cents per share adjusted, more than tripling from last year. Revenue surged more than 47% to $134.5 million.

The results were mixed compared to FactSet forecasts, which called for earnings of 12 cents per share adjusted on $132.6 million in revenue.

The report also marked four consecutive quarters of accelerating earnings and revenue growth.

CEO Jon Rambeau in the release said the “generational increase” in demand for missile and munitions programs, the U.S. government’s procurement efforts, and expansion of the space economy provides “high confidence” that both demand and Karman’s high-growth trajectory will continue.

Predictions For Sales Growth

Hypersonics and strategic missile defense revenue jumped almost 42% to $48.36 million, topping estimates for $46.2 million. Karman’s tactical missiles and integrated defense segment saw revenue spike 77% to $50.47 million, clearing forecasts for $43.6 million. However, space and launch revenue increased about 25% to $35.66 million, below views for $43.7 million.

The defense contractor said its backlog at the end of December totaled $801.1 million, while FactSet expected a backlog of $785.5 million. Karman’s backlog has ballooned to over $1 billion as of March 20, Rambeau noted in the release.

Karman also lifted its 2026 sales and EBITDA outlooks ahead of estimates. The company sees sales ranging from $715 million to $730 million for the year, while Wall Street predicts $713.8 million. Karman previously expected sales between $700 million and $715 million. Karma forecasts adjusted EBITDA to range between $207 million and $218 million. The midpoint of that outlook is slightly ahead of FactSet expectations for $211 million in adjusted EBITDA.

The company’s prior guidance called for $205 million to $215 million in adjusted EBITDA.

Analyst Sees ‘Supercycle’ Defense Spending

Elsewhere, Needham analyst Austin Bohlig earlier this month initiated coverage of Karman stock with a buy rating and a 125 price target, TheFly reported. Bohlig said Karman is “uniquely positioned” as a key supplier of mission-critical subsystems. And the company faces a $100 billion “gold rush opportunity” across next-generation missile, space, maritime and unmanned defense programs.

With the U.S. defense spending “supercycle” accelerating, Karman is positioned to outperform its 25% organic revenue growth target, Bohlig added.

Karman Stock Tests Entry

KRMN stock reversed Thursday to tumble 13% The stock initially jumped almost 5% after the market opened.

Shares on the move fell below their 50-day moving average, and triggered an automatic sell rule. Prior to the move, Karman traded near a 107.56 buy point for an eight-week cup-with-handle base.

With the market in a pullback, and IBD’s Stock Market Exposure Guide showing a 0% to 20% exposure range, investors should be building watchlists rather than jumping into new stock purchases.

Despite the drop, Karman stock is up 18% so far this year.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison.

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