BTIG analyst Andre Madrid has maintained their neutral stance on KTOS stock, giving a Hold rating today.
Andre Madrid has given his Hold rating due to a combination of factors influencing Kratos Defense’s performance. The company reported better-than-expected earnings per share for the fourth quarter of 2024, driven by growth in Kratos Unmanned Systems (KUS) and Kratos Government Solutions (KGS), as well as interest income and a lower tax rate. However, the Space and Satellite segment experienced a significant decline due to delays in manufacturing and delivery by original equipment manufacturers.
Despite strong demand signals and a robust backlog, Kratos Defense is expected to continue using free cash flow in 2025 for capital expenditures on various projects, including facility expansions and production of Valkyrie lots. The outlook for 2025 and 2026 shows promising growth, but the ongoing investments and uncertainties, such as the resolution of the current continuing resolution, contribute to the Hold rating. Additionally, the recent joint venture with RAFAEL Advanced Defense Systems to produce solid rocket motors adds potential for future growth, but its impact remains to be seen.
According to TipRanks, Madrid is a 3-star analyst with an average return of 1.9% and a 42.86% success rate. Madrid covers the Industrials sector, focusing on stocks such as AeroVironment, Carpenter Technology, and FTAI Aviation.
In another report released today, J.P. Morgan also maintained a Hold rating on the stock with a $27.00 price target.