Karman Holdings Inc. (KRMN) vs Mercury Systems Inc (MRCY)

Karman Holdings Inc. and Mercury Systems Inc are both Aerospace & Defense companies. Karman Holdings Inc. and Mercury Systems Inc are of similar size ($4.3B and $4.0B). Mercury Systems Inc has negative trailing earnings, so its P/E is not meaningful; Karman Holdings Inc. trades at 111×. Karman Holdings Inc. grew revenue faster over the last twelve months: 50.2% against 7.85%. Karman Holdings Inc. has the higher net margin (6.31% vs −3.02%) and the higher return on invested capital (5.09% vs 0.01%). Across the 18 metrics below, Karman Holdings Inc. leads on 11 and Mercury Systems Inc on 7.

Valuation

Metric KRMN MRCY Aerospace & Defense median
P/E 111.34 n/m 28.48
P/S 7.26 3.97 2.95
P/B 10.16 2.61 2.68
Price to free cash flow n/m 57.33 31.70
EV/EBITDA 32.54 56.75 16.85
EV/Sales 8.61 4.21 2.74
Earnings yield 0.90% (0.75%) 0.89%
Free cash flow yield (0.64%) 1.74% 0.00%

Profitability

Metric KRMN MRCY Aerospace & Defense median
Gross margin 41.67% 28.58% 26.41%
Operating margin 16.82% 0.03% 3.69%
Net margin 6.31% (3.02%) 2.74%
Free cash flow margin (4.63%) 6.92% 0.00%
Return on equity 9.50% (2.00%) 4.44%
Return on assets 3.10% (1.25%) 1.90%
Return on invested capital 5.09% 0.01% 0.26%

Growth

Metric KRMN MRCY Aerospace & Defense median
Revenue growth (TTM) 50.23% 7.85% 18.03%
EPS growth (last fiscal year) 62.50% 23.08% 24.80%
Revenue growth, 5-year CAGR — 1.26% 9.73%
Net income growth, 5-year CAGR — 0.00% 0.00%

Health

Metric KRMN MRCY Aerospace & Defense median
Debt to equity 2.01 0.29 0.20
Current ratio 3.56 2.96 2.85
Net debt to EBITDA 4.60 3.11 1.29

Dividend

Metric KRMN MRCY Aerospace & Defense median
Dividend yield — — 0.91%
Payout ratio — — 0.30

Size

Metric KRMN MRCY Aerospace & Defense median
Market cap 4.25b 3.99b 1.78b

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