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.
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.
