2 Reasons to Like KBR (and 1 Not So Much)

September 26, 2025 at 00:03 AM EDT

KBR Cover Image

Over the last six months, KBR’s shares have sunk to $46.71, producing a disappointing 8.4% loss - a stark contrast to the S&P 500’s 15.7% gain. This was partly due to its softer quarterly results and might have investors contemplating their next move.

Given the weaker price action, is now a good time to buy KBR? Find out in our full research report, it’s free.

Why Does KBR Stock Spark Debate?

Known for projects like the construction of Guantanamo Bay, KBR provides professional services and technologies, specializing in engineering, construction, and government services sectors.

Two Positive Attributes:

1. Encouraging Short-Term Revenue Growth

Long-term growth is the most important, but within industrials, a stretched historical view may miss new industry trends or demand cycles. KBR’s annualized revenue growth of 9.9% over the last two years is above its five-year trend, suggesting its demand recently accelerated. KBR Year-On-Year Revenue Growth

2. Operating Margin Rising, Profits Up

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

KBR’s operating margin rose by 6.3 percentage points over the last five years, as its sales growth gave it operating leverage. Its operating margin for the trailing 12 months was 8.7%.

KBR Trailing 12-Month Operating Margin (GAAP)

One Reason to be Careful:

Weak Backlog Growth Points to Soft Demand

In addition to reported revenue, backlog is a useful data point for analyzing Defense Contractors companies. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into KBR’s future revenue streams.

KBR’s backlog came in at $16.7 billion in the latest quarter, and over the last two years, its year-on-year growth averaged 3.9%. This performance was underwhelming and suggests that increasing competition is causing challenges in winning new orders. KBR Backlog

Final Judgment

KBR has huge potential even though it has some open questions. After the recent drawdown, the stock trades at 12.3× forward P/E (or $46.71 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.

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