KRMN: Upgrade in auditors should improve investor confidence, a net positive

Research evidence excerpt

KRMN: Upgrade in auditors should improve investor confidence, a net positive

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Ken Herbert (Analyst)

Stephen Strackhouse (Vice President)

Kevin Liu (Senior Associate)

Sanika Merchant (Associate)

June 11, 2026

Karman Holdings Inc

Upgrade in auditors should improve investor confidence, a net positive

NYSE: KRMN | USD 49.58 | Outperform | Price Target USD 100.00

Sentiment: Neutral

Shift in auditors represents natural evolution now as a public company. KRMN has hired PwC now as its audit firm. We believe

the change in accounting firms is a positive, as the company has previously discussed material weaknesses regarding its accounting

controls. We have no reason to believe that KRMN's financials are not reliable, but smoothing out the accounting and audit process

has taken longer than most investors would have anticipated since becoming a public company. In speaking with investors, we

believe the timing of the accounting change is a surprise, but we believe investors will support the transition to a more established

audit firm, and we view this transition as a net positive. We continue to view KRMN's margins as sustainable, with increased

volume across the company a positive tailwind. We view the auditor change as a responsible next-step for KRMN as a now-larger

public company.

YTD underperformance a focus for investors. KRMN is down (~32%) YTD, and the underperformance has been a common investor

question. We believe a key reason for the weakness has been the broader defense softness. For example, investor visibility and

confidence on the FY27 DoW budget, Iran war wind-down, potential mid-term Blue wave, and contract award timing have all

weighed on the sector.