Karman Insiders Bet $1M at $37; Earnings Due as Stock Lags
Three Karman insiders bought $1.04 million in shares at roughly $37 in September, but the stock has fallen to $34.17 ahead of today's Q3 results. Analyst consensus targets $72.62 (112% upside), while
Karman Insiders Bet $1M at $37; Earnings Due as Stock Lags
NEW YORK, November 5 —
Three insiders at Karman Holdings Inc. (KRMN) spent $1.04 million buying shares in September at prices between $36.79 and $37.44; six weeks later those positions sit underwater at $34.17, as Q3 results today mark the first test in a valuation debate where analysts say shares should be twice this price while a competing analysis says they're already 36% too expensive.
- Analyst consensus target $72.62, more than double the $34.17 current price, implying 112% upside.
- $880M in debt against $50M cash; free cash flow negative $57M over the trailing twelve months.
- Q3 consensus: $0.16 EPS (+60% YoY) and $197.5M revenue (+62.2% YoY), per Yahoo Finance.
The Insider Signal and Its Limits
David Stinnett placed the dominant bet: 27,000 shares at $37.32 on September 16, a $1.01 million open-market purchase per Form 4 filings. Two other insiders bought on the same day, all three now sitting underwater at the current price. Insider buying at this scale is not noise, but it is also not a valuation model; insiders know their own pipeline, not the market's discount rate. The purchases establish a floor of conviction at roughly $37; today's earnings print will either reinforce that floor or crack it.
Two Prices, One Stock
Karman Holdings designs payload protection systems, aerodynamic interstage hardware, and propulsion components for hypersonics, missile defense, and space launch. Revenue grew 58.2% over the trailing twelve months to roughly $590 million, with gross margin at 41.7%, reflecting the premium pricing those defense-critical programs command. Wall Street's $72.62 consensus prices that trajectory as durable. A competing view, from a Simply Wall St report published approximately November 3, argues the stock trades 36% above fair value, citing what that report described as a "Mars Mission Win"; analysts have trimmed multiples in the past month, pushing the Q3 EPS consensus 5.93% lower over 30 days.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| KRMN | $4.5B | 35.7x | -50.4% |
| VOYG | $1.4B | n/a | -5.6% |
| FLY | $2.9B | n/a | -24.4% |
| YSS | $837M | n/a | -81.9% |
| BKSY | $686M | n/a | -7.1% |
| LOAR | $6.5B | 43.2x | -9.1% |
What Q3 Must Deliver
Today's report carries a specific test: consensus calls for $0.16 EPS, 60% above a year ago, on $197.5 million in revenue. Q2's 6.9% beat broke a streak of two consecutive misses per the August 8-K, but the bar has since been revised lower. The figure that matters most for the valuation argument, though, is not the EPS line; with $880 million in debt and trailing FCF of negative $57 million, any DCF model that captures Karman's growth depends on a turn toward positive cash conversion. Free cash flow directionality is what either validates the bull case or fortifies the bears. Run the free Karman Holdings Inc. deep-dive →
Basis Report is independent research for informational purposes. It is not investment advice and not a recommendation to buy or sell any security.
Frequently Asked Questions
Why did Karman insiders buy $1M of stock?
Three Karman insiders, led by David Stinnett with 27,000 shares at $37.32, spent $1.04 million buying on the same day in September. Insider purchases at this scale signal conviction in the company's prospects, though insiders know their own pipeline, not the market's broader discount rate.
Why has Karman stock fallen despite insider buying?
The stock has declined from roughly $37 to $34.17 as the market grapples with competing valuation views. While analyst consensus targets $72.62 (112% upside), Simply Wall St argues shares trade 36% above fair value.
What does Karman Holdings make?
Karman designs payload protection systems, aerodynamic interstage hardware, and propulsion components for hypersonics, missile defense, and space launch programs. The company has grown revenue 58.2% over the past twelve months to approximately $590 million.
What are Karman's Q3 earnings expectations?
Analyst consensus calls for $0.16 EPS, 60% above prior year, on $197.5 million in revenue (62.2% growth). Karman carries $880 million in debt against $50 million cash, and free cash flow has been negative $57 million over the trailing twelve months.
Why does Karman's free cash flow matter so much?
With negative $57 million in trailing free cash flow and $880 million in debt, any valuation model depends on Karman turning toward positive cash conversion. Free cash flow directionality is what either validates the bull case or fortifies the bears.
Karman Holdings reports Q3 earnings today with its stock trading below the price three insiders paid for $1.04 million in open-market shares six weeks ago — while Wall Street consensus implies the stock should be more than twice its current price and a competing analysis argues shares are already 36% overvalued.