Kratos Defense (KTOS) AI Stock Analysis

• Market Cap: $5.48B
• Dividend Yield: N/A
• Average Volume (3M): 1.88M
• Price to Earnings (P/E): 271.8
• Beta (1Y): 1.11
• Revenue Growth: 7.32%
• EPS Growth: N/A
• Country: US
• Employees: 4,000
• Sector: Industrials
• Sector Strength: 92
• Industry: Aerospace & Defense
• EPS (TTM): 0.12
• Shares Outstanding: 153,443,340
• 10 Day Avg. Volume: 1,785,773
• 30 Day Avg. Volume: 1,875,926
• PEG Ratio: 31.49
• Price to Book (P/B): 3.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -606.73
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 1.14
• Enterprise Value/Gross Profit: 18.06
• Enterprise Value/Ebitda: 15.30
• 1Y Price Target: $38.29
• Price Target Upside: 6.33% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 71 Outperform
• Price Target: $37.00 ▲( 2.75% Upside)

Kratos Defense's stock score reflects a robust financial performance with a focus on revenue growth and a solid balance sheet. The earnings call provides a positive outlook with significant growth opportunities, despite challenges with contract costs and cash flow. Technical analysis shows moderate momentum, but the high valuation presents a risk.

Positive Factors

Hypersonic Technologies

KTOS beat expectations and announced the first flight of the low-cost hypersonic Dark Fury franchise, aligning with Congress and Pentagon needs for affordable mass.

Tactical Drone Business

The Apollo, Athena, and Thanatos drones are now all under contract, indicating progress in the tactical drone business.

Negative Factors

Space Business Uncertainty

Uncertainty remains around the space business and pace of awards at Kratos Unmanned Systems, impacting the overall outlook.

Valuation Challenges

The valuation of Kratos Unmanned Systems is challenging to justify due to the lack of a significant program of record.

Kratos Defense Business Overview & Revenue Model

Company Description

Kratos Defense & Security Solutions, Inc. operates as a government contractor of the U.S. Department of Defense. The company operates through two segments, Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment offers microwave electronic products, space and satellite communications, training and cybersecurity/ warfare, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne systems. It serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California.

How the Company Makes Money

Kratos Defense makes money through a diverse revenue model that includes the sale of products and services across its various business segments. The company's key revenue streams are driven by contracts with the U.S. government and its agencies, including the Department of Defense. Kratos also generates income from commercial customers and international clients. Significant partnerships with defense contractors and technology firms contribute to its earnings by enhancing its capability to deliver comprehensive solutions in areas like unmanned aerial systems, space and satellite communications, and defense electronics. By focusing on innovation and advanced technology development, Kratos secures both long-term contracts and project-based revenue streams.

Kratos Defense Financial Statement Overview

Summary

Kratos Defense shows positive revenue growth and a stable equity position, but struggles with low profitability margins and volatile cash flows.

Income Statement

Kratos Defense has shown a consistent revenue growth trend, increasing from $717.5M in 2019 to $1.14B in 2024. The gross profit margin has improved slightly over the years, reaching 25.26% in 2024. However, the net profit margin remains low at 1.43% in 2024, despite improvements from negative figures in previous years. EBIT and EBITDA margins have been relatively stable, though not exceptionally strong for the industry.

Balance Sheet

The balance sheet reflects a strong equity base with stockholders' equity at $976M in 2023, but a high debt-to-equity ratio of 0.33, indicating moderate leverage. The company has reduced its total debt significantly by 2024, but the absence of data for total assets and stockholders' equity for 2024 limits further analysis. The equity ratio was about 59.79% in 2023, suggesting a solid financial structure.

Cash Flow

Cash flow analysis reveals volatility, with operating cash flow fluctuating significantly over the years. Free cash flow has been inconsistent, with notable improvements in recent years but still facing challenges. The operating cash flow to net income ratio is not impressive due to the low net income figures, and the free cash flow to net income ratio remains unsteady.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.14B	1.04B	898.30M	811.50M	747.70M
	Gross Profit
287.20M	268.60M	226.00M	225.10M	203.20M
	EBIT
29.00M	31.10M	5.50M	27.90M	29.30M
	EBITDA
96.40M	79.50M	26.50M	62.80M	64.40M
	Net Income Common Stockholders
16.30M	-8.90M	-34.10M	500.00K	79.60M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
329.30M	72.80M	81.30M	349.40M	380.80M
	Total Assets
1.95B	1.63B	1.55B	1.59B	1.56B
	Total Debt
282.00M	321.40M	301.80M	339.50M	348.50M
	Net Debt
-47.30M	248.60M	220.50M	-9.90M	-32.30M
	Total Liabilities
597.70M	634.00M	604.00M	629.20M	622.70M
	Stockholders Equity
1.35B	976.00M	936.30M	945.10M	925.30M
Cash Flow		Free Cash Flow
-8.50M	12.80M	-71.10M	-15.70M	10.70M
	Operating Cash Flow
49.70M	65.20M	-25.70M	30.80M	46.60M
	Investing Cash Flow
-69.70M	-43.80M	-177.40M	-52.10M	-87.30M
	Financing Cash Flow
277.60M	-30.70M	-63.30M	-9.30M	247.70M

Kratos Defense Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 36.01
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTOS, the sentiment is Positive. The current price of 36.01 is above the 20-day moving average (MA) of 34.81, above the 50-day MA of 32.85, and above the 200-day MA of 27.78, indicating a bullish trend. The MACD of 0.72 indicates Positive momentum. The RSI at 60.16 is Neutral, neither overbought nor oversold. The STOCH value of 66.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KTOS.

Kratos Defense Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVAV	72 Outperform	$7.73B	142.63	3.94%	―	5.21%	―
MOG.A	72 Outperform	$5.68B	27.93	11.61%	0.63%	4.50%	9.90%
KTOS	71 Outperform	$5.48B	271.81	1.45%	―	7.32%	―
HXL	65 Neutral	$4.13B	33.92	7.87%	1.19%	5.37%	29.15%
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.38%	3.96%	-12.36%
MRCY	59 Neutral	$2.80B	―	-4.45%	―	5.66%	52.71%
SPR	37 Underperform	$4.37B	―	81.63%	―	-2.91%	-109.95%

Kratos Defense Corporate Events

Kratos Defense Holds Annual Shareholder Meeting

On May 14, 2025, Kratos Defense held its Annual Meeting with shareholders representing 133,981,220 shares. During the meeting, stockholders elected directors to serve until the next annual meeting, ratified Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 28, 2025, and approved the compensation of the company’s named executive officers.

The most recent analyst rating on (KTOS) stock is a Buy with a $30.00 price target. To see the full list of analyst forecasts on Kratos Defense stock, see the KTOS Stock Forecast page.