NEW YORK, December 30, 2025, 14:21 ET — Regular session
- Karman Holdings shares fell in afternoon New York trade, lagging a subdued broader market.
- Recent outflows from an aerospace and defense ETF have put the spotlight on fund-driven selling pressure.
- Investors are watching whether the pullback stabilizes ahead of the company’s next quarterly update.
Karman Holdings Inc. shares were down 3.6% at $74.81 in afternoon trading on Tuesday, after touching $74.21 at the session low. The stock traded as high as $78.55, with about 465,000 shares changing hands.
The dip comes in the final week of the year, when thinner liquidity can exaggerate moves in individual stocks. “It’s just a healthy rebalancing of allocations more so than an emotionally driven sell-off,” said Mark Hackett, chief market strategist at Nationwide, in a broader market note on holiday-thin trading.
Fund flows have also become a near-term focus for aerospace and defense names. Data cited by Nasdaq.com showed the SPDR S&P Aerospace & Defense ETF (XAR) saw an estimated $258.7 million outflow, or a 5.1% week-over-week drop in shares outstanding (from 20,475,000 to 19,425,000). A drop in shares outstanding typically reflects redemptions, meaning the fund can have to sell underlying holdings to meet investor withdrawals. 1
XAR is designed to track the aerospace and defense segment of the market, giving investors a one-ticket way to buy a basket of contractors and suppliers. State Street, which runs the ETF, says XAR aims to match the performance of the S&P Aerospace & Defense Select Industry Index before fees and expenses.
The sector tape looked steadier than Karman’s move suggested. XAR was down about 0.4% on Tuesday, while the SPDR S&P 500 ETF (SPY) was little changed, underscoring Karman’s sharper slide versus the broader market.
Karman, which does business as Karman Space & Defense, went public in February, when the company and selling shareholders raised $506 million in an upsized IPO that valued the defense and space systems maker at nearly $3 billion, Reuters reported.
In its most recent quarterly update in November, the company reported revenue of $121.8 million, up 41.7% from a year earlier. It also posted funded backlog of $758.2 million — a measure it defined as the invoiceable value of existing contracts, net of what has already been billed.
Karman said it raised and narrowed its full-year 2025 outlook, projecting revenue of $461 million to $463 million and non-GAAP adjusted EBITDA of $142 million to $143 million. Adjusted EBITDA is a profit yardstick that starts with earnings before interest, taxes, depreciation and amortization, then strips out selected items to show underlying operating performance.
The company also laid out a preliminary expectation for 2026 revenue growth of 20% to 25%, excluding future acquisitions. That makes the stock sensitive to shifts in sentiment around defense budgets, space launch spending and the cadence of government-backed programs that feed supplier order books.
In the near term, traders are watching whether Tuesday’s selloff holds near the bottom of the day’s range as year-end portfolio adjustments continue. In stocks with shorter public trading histories, flows — not headlines — can become the dominant driver for stretches of time.
Investors will also be watching for any fresh contract-related updates from primes and program owners that ripple down to suppliers, as well as any new filings that shed light on insider or institutional activity.
