Karman: Defense Darling's Outlook Strengthens After 40% Drop

Summary

Defense company Karman NYSE: KRMN was a newcomer to public equity markets in 2025, and last year proved to be a revelation for the stock. Karman priced its February 2025 IPO at $22 per share. From that point on, the firm went on a huge 230% run, ending 2025 near $73 per share. Karman Today$66.07 -1.21 (-1.79%) As of 05/14/2026 03:59 PM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$41.29▼$118.38P/E Ratio287.29Price Target$114.60 This was a standout performance within the defense sector. Karman beat out the gains of other top defense performers like Kratos Defense & Security Solutions NASDAQ: KTOS and Rocket Lab NASDAQ: RKLB. Those names surged 188% and 174% in 2025, respectively.Get Karman alerts:Sign Up Karman’s run didn't stop there, with the stock eventually hitting an all-time high near $115 in January 2026. At that time, it seemed Karman had very much gotten ahead of its skis, trading at a forward price-to-earnings (P/E) ratio above 200x. Now, Karman’s forward P/E is half that level, and the stock trades more than 40% below its highs. Considering this, and the company’s most recent earnings release, now is a good time to reassess Karman’s outlook and its ability to be a long-term winner. Karman Beats and Raises in Q1In Q1 2026, Karman posted record first-quarter revenue of $151.2 million, an increase of 51% year over year (YOY). The figure very slightly beat estimates of nearly $150.19 million. Meanwhile, adjusted earnings per share (EPS) more than doubled to 11 cents, handily beating estimates of 8 cents, which called for growth of 60%. Notably, Karman posted its fourth quarter in a row of non-adjusted profitability, with GAAP EPS coming in at 6 cents. Karman also raised its full-year guidance on multiple fronts. The firm now projects midpoint 2026 sales of $727.5 million, a $5 million increase over its previous midpoint guidance. Karman increased its adjusted earnings before interest, taxes, depreciation, and amortizat...