Karman (NYSE:KRMN) & Leonardo DRS (NASDAQ:DRS) Head to Head Review

Leonardo DRS (NASDAQ:DRS) and Karman (NYSE:KRMN) are both aerospace companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Profitability

This table compares Leonardo DRS and Karman’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Leonardo DRS	7.43%	11.37%	7.11%
Karman	2.65%	11.11%	3.97%

Institutional & Insider Ownership

18.8% of Leonardo DRS shares are owned by institutional investors. 0.1% of Leonardo DRS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for Leonardo DRS and Karman, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Leonardo DRS	0	3	6	0	2.67
Karman	0	1	7	2	3.10

Leonardo DRS currently has a consensus price target of $46.14, suggesting a potential upside of 33.28%. Karman has a consensus price target of $80.43, suggesting a potential upside of 0.66%. Given Leonardo DRS’s higher probable upside, equities analysts clearly believe Leonardo DRS is more favorable than Karman.

Valuation & Earnings

This table compares Leonardo DRS and Karman”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Leonardo DRS	$3.23 billion	2.85	$213.00 million	$0.98	35.33
Karman	$345.25 million	30.62	$12.70 million	$0.25	319.60

Leonardo DRS has higher revenue and earnings than Karman. Leonardo DRS is trading at a lower price-to-earnings ratio than Karman, indicating that it is currently the more affordable of the two stocks.

Summary

Leonardo DRS beats Karman on 9 of the 14 factors compared between the two stocks.

About Leonardo DRS

Leonardo DRS, Inc., together with its subsidiaries, provides defense electronic products and systems, and military support services. It operates through Advanced Sensing and Computing (ASC) segment, and Integrated Mission Systems (IMS) segments. The ASC segment designs, develops, and manufacture sensing and network computing technology that enables real-time situational awareness required for enhanced operational decision making and execution; and offers sensing capabilities span applications, such as missions requiring advanced detection, precision targeting and surveillance sensing, long range electro-optic/infrared, signals intelligence, and other intelligence systems including electronic warfare, ground vehicle sensing, active electronically scanned array tactical radars, dismounted soldier, and space sensing. This segment also provides network computing, which are utilized across a range of mission applications including platform computing on ground and shipboard for advanced battle management, combat systems, radar, command and control, tactical networks, tactical computing, and communications. The IMS segment designs, develops, manufacture, and integrates power conversion, control, and distribution systems, ship propulsion systems, motors and variable frequency drives, force protection systems, transportation, and logistics systems for the U.S. and allied defense customers. This segment also offers electrical propulsion systems, which includes power conversion, control, distribution, and propulsion systems, as well as power dense permanent magnet motors, energy storage systems and associated efficient, rugged, and compact power conversion, electrical actuation systems, as well as cooling technologies; and motor controllers, instrumentation and control equipment, electrical actuation systems, and thermal management systems. The company was incorporated in 1968 and is based in Arlington, Virginia. Leonardo DRS, Inc. operates as a subsidiary of Leonardo S.p.A.

About Karman

We specialize in the upfront design, testing, manufacturing, and sale of mission-critical systems for existing and emerging missile and defense, and space programs. Our integrated payload protection, propulsion, and interstage system solutions are deployed across a wide variety of existing and emerging programs supporting important Department of Defense (“DoD”) and space sector initiatives. We estimate that no single program accounted for more than 10% of sales for the nine months ended September 30, 2024 or the twelve months ended December 31, 2023, with revenue from over 100 active programs supporting current production and next-generation space, missile, hypersonic, and defense applications. We believe that our engineering expertise, vertically integrated production capabilities, and track record with critical piece part and subcomponent manufacturing positions us to successfully serve our prime customers who rely on us to deliver technical design and scaled manufacturing for integrated systems that are required to withstand extreme environments and meet stringent performance requirements. Our highly engineered solutions are organized into three key families: Payload Protection and Deployment Systems, Aerodynamic Interstage Systems, and Propulsion Systems: • Payload Protection and Deployment Systems: full design and manufacturing of the top section of a booster, launch vehicle, payload, or missile system • Aerodynamic Interstage Systems: supporting metallic and composite subsystems designed for aerodynamics and interstage separation • Propulsion Systems: offering of integrated solid rocket motors and supporting subsystems, launch systems, and ablative composites Our solutions are deployed across three growing, core end markets: Hypersonics & Strategic Missile Defense, Missile & Integrated Defense Systems, and Space & Launch. We serve a diverse customer base within these end-markets where we maintain long-standing relationships and engineering partnerships. We believe that our differentiated technical design, expertise, intellectual property, and heritage of mission success provides us with a value proposition that would be difficult to replicate by our current and potential future competitors. By utilizing our vertically integrated and concept-to-production capabilities along with a highly targeted acquisition strategy, we have created a business model aimed at creating long-term, sustainable value for our customers, the programs we support, and the warfighter. — Our business approach combines both strong organic growth and our proven buy, build, and integrate acquisition strategy. Karman Space and Defense is defined by four core acquisitions that have been fully integrated into our business to create a synergistic platform with complementary capabilities and robust intellectual property (“IP”). Our formation began with the merger of Aerospace Engineering, LLC (“AEC”) and AMRO Fabricating Corporation (“AMRO”) in October 2020, which allowed us to become one of the largest independently owned suppliers focused on manufacturing complex systems for the space and missile markets. Shortly thereafter, we acquired American Automated Engineering, Inc. (“AAE”) (December 2020), a manufacturer of high-temperature composites, and Systima Technologies (“Systima”) (September 2021), a specialist in design and integration of energetic and mechanical systems into the structural design of mission-critical space and hypersonic systems. Since inception, we have completed three additional, complementary acquisitions focused on further expanding our capability set. Altogether, these acquisitions have: • United complementary capabilities that are critical to Karman’s “concept-to- production capabilities” offering to blue chip missile and space primes • Provided a storied heritage of trusted, mission success encompassing 40+ years, which we deem vital to success in our industry • Created a platform and strategic basis to continue to seek accretive, complementary acquisitions — Today, Karman operates approximately 730,000 square feet of design, engineering, and manufacturing space, supporting a single Karman go-to-market strategy. We continue to evaluate opportunities to support anticipated growth and have recently invested to outfit a new 30,000 square foot facility in Decatur, AL to primarily service a new customer. We currently operate as a Delaware limited liability company under the name TCFIII Spaceco Holdings LLC (d/b/a Karman Space and Defense) (otherwise referred to herein as “Karman LLC”), which is a holding company that holds all of the equity interests of our operating subsidiaries. Karman LLC was formed August 20, 2020. Prior to the effectiveness of the registration statement of which this prospectus forms a part, Karman LLC will convert to a Delaware corporation and we will change our name to Karman Holdings Inc. Our principal offices are located at 5351 Argosy Ave, Huntington Beach, CA.