Karman Holdings stock price target raised to $93 by RBC Capital

Investing.com - RBC Capital has raised its price target on Karman Holdings Inc (NYSE:KRMN) to $93.00 from $78.00 while maintaining an Outperform rating. The new target sits between the analyst consensus range of $60-$100, with KRMN currently trading at $85.98, just 3% below its 52-week high of $88.82.

The price target increase reflects Karman’s acquisition of Five Axis, which RBC estimates will contribute approximately $16 million in annual revenue with 35% EBITDA margins, suggesting Karman paid about 16 times EBITDA for the business. According to InvestingPro data, Karman’s total revenue stands at $392.43 million with analysts forecasting 32% revenue growth this fiscal year.

Key Karman customers reported strong third-quarter 2025 results, with Raytheon (NYSE:RTX), Lockheed Martin Missiles Fire and Control (NYSE:LMT), and Aerojet Rocketdyne (NYSE:LHX) posting organic growth of 10%, 14%, and 15% respectively.

Space segments at Lockheed Martin and Aerojet Rocketdyne also performed well, with growth of 9% and 8% in the quarter.

RBC believes investors will focus on Karman’s growth outlook, supply chain challenges related to scaling capacity, and free cash flow, while noting that despite an elevated valuation, the company is well-positioned to benefit from growth in missile, missile defense, and space markets.

In other recent news, Karman Holdings reported second-quarter 2025 results that surpassed its pre-announcement ranges, with revenue reaching $115 million, marking a 35% increase compared to the previous year. The company also achieved an adjusted EBITDA of $35.3 million, reflecting a 30.7% margin. Karman Space & Defense has acquired Five Axis Industries for $88 million, consisting of $83 million in cash and approximately $5 million in Karman common shares. This acquisition aims to enhance Karman’s capabilities in manufacturing engineered products for commercial space engines. Analyst firms have shown interest in Karman Holdings, with Raymond James initiating coverage with a Strong Buy rating and a $100 price target, while Truist Securities started coverage with a Buy rating and a price target of $89. Additionally, RBC Capital raised its price target on Karman Holdings to $57 from $55, maintaining an Outperform rating. Meanwhile, Palladyne AI Corp. announced that retired U.S. Army Lieutenant General Stephen M. Twitty has joined its Board of Directors, bringing his extensive military experience to the company.

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