Karman Holdings Inc. — Blitz Index 47 (C)
Karman scores 47 — a $1,322M firm backlog (2.24x TTM revenue) and a 30% EBITDA margin that produces no cash.
Confidence: High · Category: frontier
Score breakdown
| Section | Score | Detail |
|---|---|---|
| A · Speed | 17 / 25 | TTM revenue $589.6M (+50.2%); Q2 2026 $182.1M (+58.2% YoY) — but organic only +24.4%, the rest acquired |
| B · Moat | 34 / 60 | Sole/single-source subsystem franchise on strategic missile programs; 7-year THAAD LTA ($218M) plus >$1B more in negotiation |
| C · Creative destruction | 9 / 15 | Second-order destruction: enabling the interceptor production ramp and automated manufacturing — displacing no incumbent itself |
| D · BlitzFailing | −13 | Net debt ~$716.7M (≈4.0x LTM adj. EBITDA) after five debt-funded deals in 17 months; top 3 customers 51.5% of FY2025 revenue; negative FCF despite ~30% EBITDA margin |
Radar axes (0–100): Moat 56.7 · Speed 68 · Creative 60.
Watch item
Gates: G1 ✓ · G2 ✓ (estimate — subsystem slices only, never the prime-award headline). 18 points below the threshold — first score. Demerits 13, two points below the FLAG line.
Strengths
- Firm backlog $1,322M (+128% in 18 months, ~69% organic) + Q2 book-to-bill ~2.7x — demand visibility most hardware companies never get
- THAAD 7-year $218M LTA (Lockheed Martin, 2026-10-20) + >$1B of further LTAs in negotiation — backlog turning into multi-year contracted revenue
- Gross margin rising every year (35.8% → 43.0%) with adj. EBITDA stable ~30% — scaling efficiency, not margin giveaway
- Four end markets (Hypersonics / Tactical / Space / new Maritime) with no single program >10% of sales
- Sole/single-source positions on strategic missile programs + vertical integration — a qualification moat that takes years to replicate
- No dual-class stock; single class, one vote per share
Concerns
- Net debt ~$716.7M ≈ 4.0x LTM adj. EBITDA after ~$530M+ of debt-funded M&A in 17 months; term loan now $864M original principal
- Negative free cash flow despite ~30% adj. EBITDA margin (FY2025 ≈ −$42.5M, H1 2026 ≈ −$24.8M) — working capital + capex + interest absorb the margin
- Top 3 customers 51.5% of FY2025 revenue (unnamed); government termination-for-convenience rights; FY2027 interceptor funding partly un-enacted
- Growth quality: only +24.4% organic vs +58.2% total in Q2; FY2025 organic/inorganic split undisclosed; ISP earnout written to zero
- Two C-suite transitions in one year (CEO March 2026, CFO September 2026) + classified board + blank-check preferred + a pledged director stake
- Short public history (IPO February 2025); stock −69% from its 52-week high ($118.38 → $36.65)
More Frontier companies
Other Frontier names on the Blitz Index, highest score first: Rocket Lab (62/B), Tesla (62/B), Illumina, Inc. (60/B).
Next earnings
Nov 5, 2026 · After close · Confirmed
Coverage
Karman Holdings Inc. · Q3 FY2026 due Nov 5, 2026 (AMC) · Score 47 · Grade C
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BlitzLab scores businesses against a scholar’s standard — not investment advice. No price targets, no buy/sell recommendations. Figures are from SEC filings (XBRL) as labeled in the source scorecard.