Karman Insiders Bought at $37, Now Underwater at Low
Three Karman insiders purchased $1.04 million in open-market stock on September 16 at $37.32, coinciding with a Regulation FD filing, betting on record backlog momentum. Trading now at a 1-year low of
Insiders Paid $37 as Karman Slides to 1-Year Low
NEW YORK, October 15 —
Three Karman Holdings Inc. (KRMN) insiders paid $1.04 million in open-market purchases on September 16, alongside a Regulation FD filing, and are now underwater at a 1-year low of $33.45. Whether they saw something the market has since missed, or stepped in front of $880 million in debt and negative free cash flow, is what the stock is now asking.
- Record Q2 2026 revenue and backlog; EPS of $0.14 beat consensus by 6.9%, reversing two consecutive misses.
- Trailing revenue $590 million, up 58.2% year-over-year; gross margin 41.7%; free cash flow negative $57 million.
- Total debt $880 million against $50 million cash; short interest 12.7% of float; consensus target $83.27.
The Case the Insiders Are Making
David Stinnett spent roughly $1 million personally at $37.32 on the day Karman filed a Regulation FD disclosure, per filings; directors Mary D. Petryszyn and Stephen Twitty added smaller positions the same day. Open-market purchases carry more signaling weight than grant-related transactions because insiders deploy personal capital against the market's assessment. Karman designs and manufactures payload protection systems, aerodynamic interstage systems, and propulsion components for U.S. defense and space customers across three end markets: hypersonics and strategic missile defense, tactical missiles, and space launch. The September buying came six weeks after a Q2 that delivered record revenue and Karman's first positive EPS surprise in three quarters per its August earnings filing.
The Balance Sheet the Backlog Has to Outrun
The optimistic read of September 16 runs into a balance sheet that hasn't settled. Karman carries $880 million in total debt against $50 million in cash, while trailing free cash flow was negative $57 million despite 58.2% revenue growth. At 35.2x forward earnings, the multiple prices in rapid cash flow improvement; a DCF calculator makes the sensitivity to conversion timing concrete. An August 28 8-K disclosed a new material financial obligation, and a separate filing on earnings day disclosed another.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| KRMN | $4.4B | 35.1x | -60.8% |
| VOYG | $1.6B | n/a | -24.7% |
| FLY | $2.9B | n/a | -39.3% |
| YSS | $818M | n/a | -82.3% |
| BKSY | $734M | n/a | -32.3% |
| LOAR | $5.8B | 38.6x | -23.9% |
What Q3 Has to Confirm
The analyst consensus sits at $83.27 after cuts from $87.10, leaving a 149% gap above current levels. A spread that wide typically reflects one of two things: the market pricing in risks in the debt and cash flow profile that models haven't absorbed, or the market discounting progress insiders believe is visible in the backlog. The number to watch is free cash flow in Q3 2026; if the backlog is converting, operating cash flow should begin trending toward breakeven, narrowing the argument that 12.7% short interest has. Any quarterly filing or backlog update is the first checkpoint. 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
What did Karman Holdings insiders buy?
Three Karman insiders, including CEO David Stinnett, purchased $1.04 million in open-market stock on September 16 at an average of $37.32 per share, coinciding with a Regulation FD disclosure. The purchases followed a Q2 earnings beat that delivered record revenue and a positive EPS surprise.
Why is Karman Holdings stock at a 1-year low?
Karman stock declined to $33.45 despite the Q2 earnings beat, reflecting investor concerns about the company's balance sheet. The company carries $880 million in total debt against just $50 million in cash and posted negative free cash flow of $57 million.
What is the analyst consensus on Karman Holdings?
The analyst consensus price target is $83.27, representing a 149% gap above current levels and down from a prior target of $87.10. At 35.2x forward earnings, the stock is pricing in rapid improvements in free cash flow conversion.
What does Karman Holdings design and manufacture?
Karman designs and manufactures payload protection systems, aerodynamic interstage systems, and propulsion components for U.S. defense and space customers across three end markets: hypersonics and strategic missile defense, tactical missiles, and space launch.
What metric will determine Karman's stock direction?
Free cash flow in Q3 2026 is the key metric to watch. If the company's record backlog is converting to cash, operating cash flow should trend toward breakeven, which would narrow the short interest argument and validate the insiders' $37 purchase price.
Three Karman Holdings insiders paid $36.79–$37.44 per share in open-market purchases totaling roughly $1.04 million on September 16, 2026. The stock has since fallen to a new 1-year low near $33.45 — leaving those buyers underwater while the Wall Street consensus target sits at $83.27, far above current levels.