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what it is
KBR helps governments and industrial customers run complex projects, from military support to energy technology.
how it gets paid
Last year Kbr made $7.8B in revenue. government services was the main engine at $3.90B, or 50% of sales.
why it's growing
Revenue grew 1.0% last year. 14.6% gross margin mattered because margin expansion, not just revenue growth, is what turns a contractor into a stock people pay up for.
what just happened
Revenue hit $5.9B, while the company also posted an earnings beat versus the $0.94 estimate.
At a glance
B+ balance sheet — decent shape, but not bulletproof
95/100 earnings predictability — you can trust these numbers
10.5x trailing p/e — the market's not buying it — or you found a deal
1.8% dividend yield — cash in your pocket every quarter
19.0% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
KBR helps governments and industrial customers run complex projects, from military support to energy technology.
KBR sells trust where failure gets expensive fast. Government Solutions produced 75% of 2024 revenue, and those contracts run for years because your cheapest bid looks dumb when the mission breaks. A 19.0% return on capital means KBR is still earning strong profits after paying to keep the machine running.
How they make money
$7.8B
annual revenue · their business grew +1.0% last year
government services
$3.90B
energy solutions
$1.95B
petrochemicals work
$1.17B
industrial and commercial services
$0.78B
The products that matter
engineers and manages complex contracts
Government and Industrial Services
$7.8B revenue · $23.4B backlog
this is effectively the whole business in the snapshot data. It produced $7.8B in revenue last year, and the $23.4B backlog is why investors care more about conversion than product mix.
3x revenue backlog
Key numbers
10.5x
trailing p/e
P/E → how many dollars you pay for each dollar of profit → so what: KBR is priced below many steady contractors despite 14.0% projected earnings growth.
19.0%
return on capital
Return on capital → profit earned on the money used in the business → so what: KBR turns projects into cash better than a lot of industrial peers.
15.5%
operating margin
Operating margin → what is left after core costs → so what: this is strong for an engineering contractor, where many peers live in thinner margins.
47%
foreign sales
Foreign sales → revenue earned outside the U.S. → so what: you get diversification, but you also inherit tariff and geopolitical headaches.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 65 / 100
- long-term debt $2.6B (33% of capital)
- net profit margin 6.8% — keeps 7 cents of every dollar in revenue
- return on equity 34% — $0.34 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in KBR 3 years ago → it's now worth $7,520.
The index would have given you $13,880.
source: institutional data · total return
What just happened
beat estimates
Revenue hit $5.9B, while the company also posted an earnings beat versus the $0.94 estimate.
SEC-reported results showed revenue of $5.9B, EPS of $2.33, and 14.6% gross margin. Consensus showed a $0.99 adjusted EPS beat, which is the usual GAAP-versus-adjusted accounting split in contractor earnings.
$5.9B
revenue
$2.33
eps
14.6%
gross margin
the number that mattered
14.6% gross margin mattered because margin expansion, not just revenue growth, is what turns a contractor into a stock people pay up for.
-
kbr is likely to close out 2025 with solid financial results.the global technology and engineering services company is expected to report total revenues around $7.85 billion, reflecting a marginal increase from a year ago. while the top line faced minor headwinds from u.s. government budget fluctuations and timing delays, kbr’s primary catalyst remains its massive backlog and options which, at the end of the third quarter, reached an alltime high of $23.4 billion. this provides multi-year revenue visibility, which has enabled kbr to maintain strong margins even amid top-line pressures. it also means a substantial portion of future earnings is already contracted, acting as a financial moat that helps shield kbr from short-term market volatility. although procurement timing remains uneven across government programs, kbr’s federal pipeline remains robust.
-
this is further bolstered by continued investment in space operations, defense modernization, and advanced mission-support technologies.
-
these federal wins not only contribute to backlog growth but also improve longerterm revenue visibility, positioning kbr to benefit from sustained u.s. government spending in mission-critical domains.
-
kbr operates in a sector defined by high barriers to entry and long project cycles.
-
this setup fosters durable competitive advantages.its core business is a leader in proprietary process technologies and specialized engineering services for global energy and materials industries.
source: company earnings report, 2026
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What could go wrong
the top risk is backlog that stays on paper instead of showing up in growth. KBR already has $23.4B of work lined up. Last year's revenue still only grew 0.6%.
med
backlog conversion risk
A $23.4B backlog sounds like protection, but the income statement only showed $7.8B of revenue and 0.6% growth. If project timing slips or revenue recognition stays slow, the stock can remain cheap for a long time.
The valuation case depends on backlog staying near 3x revenue and translating into more than the current move from $7.8B to about $8B.
med
execution on thin margins
KBR keeps 6.4% of revenue as profit. That is workable, but it leaves less room for project mistakes, cost overruns, or delayed milestones than a higher-margin business would have.
When margins start at 6.4%, small misses matter more. That is the downside of contractor economics.
med
legal and regulatory overhang
The company has past legal and proxy-related issues in its history. The data here is thin, so we are not going to pretend we know the current exposure size. But government-facing contractors do not get the luxury of loose compliance.
This is less about a clean percentage hit and more about whether compliance noise distracts from the only thing investors want to see: backlog turning into clean execution.
med
weak sponsorship from institutions
Institutions have been net sellers for three straight quarters, including 147 sellers versus 129 buyers last quarter. That is not fatal. It is also not what early reratings usually look like.
If estimates stop improving while institutions keep heading for the exit, the stock may stay stuck around contractor multiples.
The combined risk picture is simple: KBR has $23.4B of backlog, but only $7.8B of revenue and 6.4% net margin to show for it today. If FY2026 stalls near current levels, 10.5x earnings may be fair, not cheap.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next report needs more than another backlog headline
Watch whether management moves the FY2026 path above roughly $8B of revenue and $4.10 of EPS. That is the bar already in the numbers.
metric
backlog versus revenue
The backlog is $23.4B, or roughly 3x annual revenue. If that ratio starts falling without faster revenue growth, the visibility argument gets weaker.
risk
margin discipline
Net margin is 6.4%. In a business like this, a small margin miss is a real earnings miss. Watch profitability, not just contract wins.
trend
institutional selling streak
Three straight quarters of net selling is a trend. If that flips, the market may finally believe the rerating story.
Analyst rankings
short-term outlook
average
momentum score 3 — in human-speak, analysts do not see a strong near-term signal in the tape.
risk profile
average
stability score 3 — this sits in the middle of the pack, not especially safe and not especially wild.
chart momentum
average
technical score 3 — the chart is not screaming anything dramatic right now.
earnings predictability
95 / 100
Management usually lands close to plan. For a contractor, that kind of consistency matters.
source: institutional data
Institutional activity
institutions have been net selling for 3 consecutive quarters — 129 buyers vs. 147 sellers in 4q2025. total institutional holdings: 0.1B shares. net selling for 3 quarters.
source: institutional data
Price targets
3-5 year target range
$35
$91
$40
current price
$63
target midpoint · +56% from current · 3-5yr high: $115 (+185% · 31% ann'l return)
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