Kratos Defense (KTOS) AI Stock Analysis

• Market Cap: $12.85B
• Dividend Yield: N/A
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 619.7
• Beta (1Y): 1.41
• Revenue Growth: 14.00%
• EPS Growth: 23.78%
• Country: US
• Employees: 4,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.14
• Shares Outstanding: 168,840,710
• 10 Day Avg. Volume: 2,436,922
• 30 Day Avg. Volume: 3,280,172
• PEG Ratio: -0.93
• Price to Book (P/B): 2.92
• Price to Sales (P/S): 3.48
• P/FCF Ratio: -464.88
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 11.28
• Enterprise Value/Gross Profit: 49.22
• Enterprise Value/Ebitda: 158.15
• 1Y Price Target: $100.69
• Price Target Upside: 32.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 0.54
• Revenue Forecast (FY): $1.33B

• Rating: 61 Neutral
• Price Target: $82.00 ▲(7.75% Upside)

Kratos Defense's overall score is driven by strong earnings call insights and a solid balance sheet, but is weighed down by high valuation metrics and cash flow challenges. The technical indicators suggest potential caution due to the RSI nearing oversold levels.

Positive Factors

Revenue Growth

The increased revenue forecast indicates strong demand for Kratos' offerings, suggesting robust market position and growth potential.

Strategic Acquisitions

The acquisition of Orbit enhances Kratos' capabilities in satellite communications, expanding its market reach and strengthening its competitive position.

Program Wins

Securing long-term program wins ensures sustained revenue streams and strengthens Kratos' position in the defense sector.

Negative Factors

Cash Flow Challenges

Ongoing cash flow challenges can limit Kratos' ability to invest in growth opportunities and may affect financial flexibility.

Increased Material Costs

Rising material costs can pressure margins and profitability, impacting Kratos' ability to maintain cost-effective operations.

Government Shutdown Impact

Delays in government payments can strain Kratos' cash flow and operational efficiency, affecting short-term financial stability.

Kratos Defense Business Overview & Revenue Model

Company Description

Kratos Defense & Security Solutions, Inc. (KTOS) is a leading provider of advanced technology solutions for the defense, security, and communications sectors. The company specializes in unmanned systems, satellite communications, cybersecurity, and missile defense systems, offering innovative products and services that support U.S. government and military operations as well as international defense needs. Kratos is known for its cost-effective, rapid development capabilities and focuses on delivering high-performance solutions that enhance national security and operational readiness.

How the Company Makes Money

Kratos generates revenue primarily through government contracts, selling its products and services to various branches of the U.S. Department of Defense and other government agencies. Key revenue streams include the development and production of unmanned aerial systems, satellite communication technologies, and advanced cybersecurity solutions. The company also engages in research and development projects funded by government contracts, which contribute significantly to its earnings. Additionally, Kratos has established strategic partnerships with other defense contractors and technology firms, enhancing its capabilities and expanding its market reach, further supporting its financial performance.

Kratos Defense Financial Statement Overview

Summary

Kratos Defense shows moderate revenue growth but struggles with profitability and cash flow management. The company maintains a strong balance sheet with low leverage, providing financial stability. However, improving operational efficiency and cash flow generation is crucial.

Income Statement

Kratos Defense shows moderate revenue growth with a 4.43% increase in TTM, indicating a positive trajectory. However, profitability margins such as the net profit margin (1.20%) and EBIT margin (1.99%) are relatively low, suggesting challenges in cost management or pricing power. The gross profit margin has slightly decreased over time, indicating potential pressure on production costs or pricing strategies.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.056, indicating conservative leverage and financial stability. The equity ratio is healthy, reflecting a strong capital base. However, the return on equity (ROE) is low at 0.96%, suggesting limited profitability relative to shareholder equity.

Cash Flow

Kratos Defense faces challenges in cash flow management, with negative free cash flow and a high free cash flow to net income ratio of -5.67, indicating cash flow issues relative to earnings. The operating cash flow to net income ratio is low at 0.033, suggesting inefficiencies in converting earnings into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.28B	1.14B	1.04B	898.30M	811.50M	747.70M
Gross Profit	294.30M	287.20M	268.60M	226.00M	225.10M	203.20M
EBITDA	91.60M	93.60M	77.50M	26.20M	62.80M	64.40M
Net Income	20.00M	16.30M	-8.90M	-36.90M	-2.00M	79.60M
Balance Sheet
Total Assets	2.42B	1.95B	1.63B	1.55B	1.59B	1.56B
Cash, Cash Equivalents and Short-Term Investments	565.90M	329.30M	72.80M	81.30M	349.40M	380.80M
Total Debt	134.30M	282.00M	321.40M	301.80M	339.50M	348.50M
Total Liabilities	441.80M	597.70M	634.00M	604.00M	629.20M	622.70M
Stockholders Equity	1.98B	1.35B	976.00M	936.30M	945.10M	925.30M
Cash Flow
Free Cash Flow	-93.30M	-8.50M	12.80M	-71.10M	-15.70M	10.70M
Operating Cash Flow	-8.60M	49.70M	65.20M	-25.70M	30.80M	46.60M
Investing Cash Flow	-84.70M	-69.70M	-43.80M	-177.40M	-52.10M	-87.30M
Financing Cash Flow	357.20M	277.60M	-30.70M	-63.30M	-9.30M	247.70M

Kratos Defense Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 76.10
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 76.1 is below the 20-day moving average (MA) of 76.25, below the 50-day MA of 84.89, and above the 200-day MA of 54.14, indicating a neutral trend. The MACD of -3.16 indicates Negative momentum. The RSI at 47.25 is Neutral, neither overbought nor oversold. The STOCH value of 90.03 is Negative, 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
HII	74 Outperform	$12.33B	21.71	12.39%	1.73%	2.60%	-18.22%
ERJ	73 Outperform	―	―	12.21%	0.08%	22.29%	51.90%
DRS	68 Neutral	$9.09B	34.66	10.35%	1.05%	12.27%	33.16%
TXT	67 Neutral	$14.65B	18.29	11.46%	0.10%	1.83%	-0.73%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
KTOS	61 Neutral	$12.85B	619.71	1.20%	―	14.00%	23.78%
AVAV	58 Neutral	$13.94B	―	-1.70%	―	44.04%	-129.81%

Kratos Defense Corporate Events

Kratos Defense & Security Solutions’ Earnings Call Highlights Growth and Challenges

Kratos Defense & Security Solutions’ recent earnings call painted a picture of robust growth and strategic positioning, despite some challenges. The company reported strong revenue growth, significant program wins, and strategic acquisitions, setting a positive tone for future success. However, it also acknowledged challenges such as increased material costs and cash flow issues, partly due to the federal government shutdown.

Kratos Defense Reports Strong Q3 2025 Growth

Kratos Defense & Security Solutions, Inc. is a technology company operating in the defense, national security, and commercial markets, known for its innovative and cost-effective solutions in unmanned systems, satellite communications, and military-grade hardware.

Kratos Defense & Security’s Promising Q2 Earnings Call

Kratos Defense & Security Solutions recently held its second quarter 2025 earnings call, revealing a positive sentiment overall. The company showcased strong organic revenue growth, significant new program wins, and increased financial guidance, indicating a promising trajectory for future growth. However, the call also acknowledged ongoing challenges with cash flow and cost pressures in certain segments.

Kratos Defense Reports Strong Q2 2025 Growth

Kratos Defense & Security Solutions, Inc., a technology company operating in the defense, national security, and commercial markets, is known for its innovative and cost-effective solutions in areas such as unmanned aerial systems, hypersonic vehicles, and satellite communications.