What Makes Karman Holdings (KRMN) an Investment Bet?

Conestoga Capital Advisors, an asset management company, released its fourth-quarter 2025 investor letter. As many believe, US equities experienced solid returns in 2025, with double-digit gains across all major indices, yet underlying conditions revealed extreme volatility and market leadership. A copy of the letter can be downloaded here. In Q4 2025, Conestoga Capital Advisors Small Cap Strategy returned -1.89% net-of-fees, trailing the Russell 2000 Growth Index’s 1.22% return. The returns were volatile in the quarter. The “low quality” stocks rally persisted in the quarter, but at a slower pace compared to earlier quarters. Please review the Strategy’s top five holdings to gain insights into their key selections for 2025.

In its fourth-quarter 2025 investor letter, Conestoga Capital Advisors highlighted its latest purchase, Karman Holdings Inc. (NYSE:KRMN). Karman Holdings Inc. (NYSE:KRMN) is an American defense technology company that engages in the design and manufacturing of mission-critical systems. On February 19, 2026, Karman Holdings Inc. (NYSE:KRMN) stock closed at $88.46 per share. One-month return of Karman Holdings Inc. (NYSE:KRMN) was -18.26% and gained 201.60% over the past 52 weeks. Karman Holdings Inc. (NYSE:KRMN) has a market capitalization of $11.705 billion.

Conestoga Capital Advisors stated the following regarding Karman Holdings Inc. (NYSE:KRMN) in its fourth quarter 2025 investor letter:

"Karman Holdings Inc. (NYSE:KRMN) is a defense technology company specializing in the design and manufacturing of highly engineered, mission-critical systems for a diverse set of existing and next-generation space, missiles, hypersonic, and defense programs. KRMN generates mid-teens or better organic revenue growth that is complimented by tuck-in M&A. They sell to over 70 customers across more than 100 defense programs. Over 90% of revenue is IP protected and nearly 90% of revenue is bought by their customers on a sole source basis."

Karman Holdings Inc. (NYSE:KRMN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 34 hedge fund portfolios held Karman Holdings Inc. (NYSE:KRMN) at the end of the third quarter, up from 31 in the previous quarter. While we acknowledge the potential of Karman Holdings Inc. (NYSE:KRMN) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Karman Holdings Inc. (NYSE:KRMN) and shared a list of rising stocks. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.