KGS · investment memo
The company's own TTM filed operating margin (EBIT $357,636k / revenue $1,324,217k = 27.01%), reconciled through the FY2025 10-K opex bridge which closes to the dollar: 42.20% gross - 11.01% SG&A - 0.49% impairment - 4.71% loss on sale = 25.99% = filed income from operations. Not a peer median, not an industry percentile, not max(own, sector). Constraint m_EBIT,T 27.0 <= m_gross,T 42.2 SATISFIED with 15.2pp of headroom. EQUAL TO the trailing actual, so the below-trailing error class does not apply. Normalising the abnormal disposal-loss and impairment lines would justify 28.4%; that was declined because the fleet-renewal programme generating the disposals is ongoing. NOTE a defect the memo caught: steady_state_check.py reports the 'latest margin' as 31.7% because it reads Alpha Vantage operatingIncome against a filed 26.0%.
Four distinct questions, one field each. A price is not a thesis: the trigger below forces a re-underwrite and freezes further purchases — it is never an automatic sell.
A daily close below $48.44 triggers a mandatory re-underwrite and freezes further purchases. It is not an automatic sell unless a separate fundamental invalidation condition has been breached.
Not stated. This name has no falsifiable invalidation conditions on file, so it cannot be risk-monitored. That is a gap in the research, not a clean bill of health — recorded rather than hidden.
1. The consensus revenue path is not evidenced by Q1. Consensus FY2026 revenue is $1,515.1m (+15.8% on FY2025's $1,308.1m) with a Q2'26 estimate of $383.0m against Q1'26 actual of $345.8m — a +10.8% sequential step in a business that grew 4.9% year over year and is at 98% utilisation. If that step does not arrive, the 12-month target in the valuation file falls from $79.5 to $66.9. 2. Rollover risk is quantified and it is 9.0% of revenue-generating horsepower on 30–90-day notice. In a gas-price downturn that is the first revenue to leave. 3. Leverage. Net debt $2,692.6m against ~$690m of TTM a