Kbr, Inc.KBR · NYSE

Results over the years

Fiscal years from SEC filings (10-K).

Why the market may be pricing it low

• Customer concentration in the U.S. government means shutdowns and budget delays directly hit results, a risk investors watch closely.

  Subsequent to the U.S. government shutdown starting on October 1, 2025, we experienced delays in project execution, collection of payments and contract awards.Business

• The disclosed spin-off of the Mission Technology Solutions unit itself creates risk of stranded costs and lost scale for the remaining company, and this unresolved process weighs on valuation.

  We are subject to risks related to our plan to spin off our Mission Technology Solutions business into a standalone, publicly traded company.Risk factors

• Some government contracts are classified, meaning investors cannot fully verify the underlying business, which is itself flagged as a risk.

  Several of our contracts with the U.S. government are classified, which may limit investor insight into portions of our business.Risk factors

What could close the gap

• Enactment of the FY2026 appropriations act in February 2026, finalizing defense spending, could ease fears of delayed government orders and payments.

  On February 3, 2026, the Consolidated Appropriations Act of 2026 was passed, which finalized defense appropriations for fiscal year 2026.Business

• Completion of the Mission Technology Solutions spin-off could let the classified-heavy business be valued on its own as a standalone company.

  We are subject to risks related to our plan to spin off our Mission Technology Solutions business into a standalone, publicly traded company.Risk factors

How a buyer could still lose (value trap)

• After the spin-off, both companies may face stranded costs and lost scale, causing operating expenses to run higher than planned and eroding current profit levels.

  Following the Planned Spin-Off, we and the spun-off Mission Technology Solutions business may face stranded costs, loss of economies of scale, and higher operating expenses than currently anticipated, which could materially adversely affect our profitability.Risk factors

• Borrowings of $2,552M against cash of only $312M and net assets of $1,636M leave a debt-heavy balance sheet that could strain the company if earnings weaken.

  Based on the figures below

Financial quality (Piotroski F-score)

• ✓Profitable (ROA > 0)
• –Positive operating cash flowno data
• ✓ROA up on last year
• –Cash flow exceeds net profitno data
• ✗Leverage down on last year
• ✓Current ratio up on last year
• ✓No new shares issued
• ✓Gross margin up on last year
• ✓Asset turnover up on last year

Scored out of the checks with data, scaled to 9. Compares the latest year with the year before.

Figures

Sales

$7.8bn

Operating profit

$729m

Net profit

$442m

Operating cash flow

$469m

Cash

$439m

Debt

$2.5bn

Equity

$1.8bn

Latest twelve months to 2026-10-02; F-score for the fiscal year to 2026-01-02