2 Space and Defense Stocks Turning Backlogs Into Revenue Growth

Karman (KRMN) and AeroVironment (AVAV) are converting record backlogs into revenue despite steep 2025 selloffs, both down 40% year-to-date even as Wall Street analysts maintain buy ratings.

Karman posted record Q1 2026 revenue of $151 million, up 51% year-over-year, backed by a backlog exceeding $1 billion. The space and defense contractor now trades at a price-to-earnings ratio near 200 following its 40% decline this year.

AeroVironment holds a $1.1 billion funded backlog and secured $4.6 billion in awards year-to-date. The company delivered 143% year-over-year revenue growth in its latest quarter, though it missed analyst expectations. Like Karman, AVAV has dropped 40% in 2025 despite the operational momentum.

Both companies are benefiting from elevated global defense spending, with backlogs providing revenue visibility as they execute on existing contracts. Analysts continue to favor both names despite recent price action and valuation concerns at Karman.