Kratos Defense (KTOS)
NASDAQ:KTOS
Top Page
Kratos Defense
(NASDAQ:KTOS)
Select Model
Select Model
Rating:52Neutral
Price Target:
$68.00
▼(-3.33% Downside)
Action:ReiteratedDate:03/26/26
The score is held back primarily by mid-range financial quality (thin/uneven profitability and volatile free cash flow) and very expensive valuation (P/E ~606), alongside weak current technical momentum. These are partly offset by an optimistic earnings call with strong growth guidance, record backlog, and clear long-term program ramp drivers, though near-term cash and margin pressures remain.
Positive Factors
Record backlog and large opportunity pipeline
A $1.573B backlog and $13.7B pipeline provide durable revenue visibility and priority on program awards. This backlog supports multi-year production planning, capacity utilization and follow-on awards, reducing near-term revenue volatility and strengthening negotiating leverage with suppliers and primes.
Negative Factors
Volatile cash generation and negative free cash flow
Repeated negative free cash flow and uneven operating cash conversion undermine the firm's ability to self-fund capex, M&A and working-capital needs. Persistent FCF volatility raises refinancing and execution risk as the company scales production and invests in new facilities and programs.
Read all positive and negative factors
Positive Factors
Negative Factors
Record backlog and large opportunity pipeline
A $1.573B backlog and $13.7B pipeline provide durable revenue visibility and priority on program awards. This backlog supports multi-year production planning, capacity utilization and follow-on awards, reducing near-term revenue volatility and strengthening negotiating leverage with suppliers and primes.
Read all positive factors
Kratos Defense (KTOS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.18B
Dividend YieldN/A
Average Volume (3M)4.37M
Price to Earnings (P/E)606.6
Beta (1Y)1.61
Revenue Growth14.00%
EPS Growth23.78%
CountryUS
Employees4,000
SectorIndustrials
Sector Strength72
IndustryAerospace & Defense
Share Statistics
EPS (TTM)0.18
Shares Outstanding187,333,630
10 Day Avg. Volume3,781,024
30 Day Avg. Volume4,370,143
Financial Highlights & Ratios
PEG Ratio33.36
Price to Book (P/B)6.68
Price to Sales (P/S)9.91
P/FCF Ratio-97.12
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue9.50
Enterprise Value/Gross Profit42.90
Enterprise Value/Ebitda137.15
Forecast
1Y Price Target
$113.92Price Target Upside61.96% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)0.77
Revenue Forecast (FY)$1.66B
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 o...
How the Company Makes Money
Kratos primarily makes money by selling defense products and providing services under contracts with U.S. government agencies (notably the Department of Defense) and, in some cases, allied/international customers and prime contractors. Revenue is ...
Kratos Defense Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down sales by Kratos’ operating segments to show which products or business lines drive growth and where revenue is concentrated. Useful for spotting high-growth areas, customer or program concentration risk, and sensitivity to shifts in defense spending or contract awards.
Breaks down sales by Kratos’ operating segments to show which products or business lines drive growth and where revenue is concentrated. Useful for spotting high-growth areas, customer or program concentration risk, and sensitivity to shifts in defense spending or contract awards.
Data provided by:
The Fly
The FlyKratos Defense Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
Overall the call was constructive and optimistic: management reported a quarter that beat revenue and EBITDA expectations, delivered record backlog and pipeline metrics, and outlined several high-growth engines (hypersonics, space/satellite, engines, microwave electronics) supported by facility investments, partnerships and program wins. Near-term risks include working capital strain (DSO rise and receivables), margin pressure on certain fixed-price contracts in Unmanned Systems, elevated capex and the timing sensitivity of government funding. Management provided clear guidance and emphasized line-of-sight growth drivers with the expectation that operating cash flow and free cash flow will improve as production ramps in 2027-2028.Positive Updates
Q4 Revenue Beat and Strong Organic Growth
Q4 revenue of $345.1 million vs. guidance $320M-$330M; Q4 organic revenue growth ~20% year-over-year (above prior estimates of ~14%-15%); company generated a 1.3:1 overall book-to-bill ratio in Q4.
Negative Updates
Margin Pressure from Fixed-Price Contracts
Continued increased subcontractor and material costs on certain multiyear fixed-price contracts (notably in Unmanned Systems) are pressuring margins; those costs cannot be recovered until renewal of future production lot contracts.
Read all updates
Q4-2025 Updates
Positive
Negative
Q4 Revenue Beat and Strong Organic Growth
Q4 revenue of $345.1 million vs. guidance $320M-$330M; Q4 organic revenue growth ~20% year-over-year (above prior estimates of ~14%-15%); company generated a 1.3:1 overall book-to-bill ratio in Q4.
Read all positive updates
Company Guidance
Kratos guided Q1 2026 revenue of $335–$345M (organic growth 7.5%–9.5% vs Q1 2025) with adjusted EBITDA of $25–$30M, and full‑year 2026 revenue of $1.595–$1.675B (organic growth 12.7%–18.5% vs 2025); management said Q1 will be the low quarter as the company ramps after the CRA and government shutdown, included the mid‑Feb Nomad acquisition in guidance (Orbit excluded), and expects continued working‑capital use (DSOs rose to 121 days) and pressure from higher material/subcontractor costs on some fixed‑price Unmanned contracts (Q4 contract mix: 70% fixed‑price / 26% cost‑type / 4% T&M). They forecast 2026 CapEx of $135–$145M (including $30–$35M shifted from 2025), Prometheus funding of ~ $50M in 2026, and noted headline metrics that underpin the guidance: Q4 revenue $345.1M and adjusted EBITDA $34.1M, record backlog $1.573B, a $13.7B opportunity pipeline, 120 SRMs on order, and hypersonic revenue expected to roughly double to ~$400M in 2026 (and reach ~ $700M in 2027).Kratos Defense Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
62
Positive
Cash Flow
45
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.35B | 1.14B | 1.04B | 898.30M | 811.50M |
| Gross Profit | 298.30M | 287.20M | 268.60M | 226.00M | 225.10M |
| EBITDA | 103.80M | 93.60M | 77.50M | 26.20M | 62.80M |
| Net Income | 22.00M | 16.30M | -8.90M | -36.90M | -2.00M |
Balance Sheet | |||||
| Total Assets | 2.47B | 1.95B | 1.63B | 1.55B | 1.59B |
| Cash, Cash Equivalents and Short-Term Investments | 560.60M | 329.30M | 72.80M | 81.30M | 349.40M |
| Total Debt | 179.60M | 282.00M | 321.40M | 301.80M | 339.50M |
| Total Liabilities | 470.90M | 597.70M | 634.00M | 604.00M | 629.20M |
| Stockholders Equity | 2.00B | 1.35B | 976.00M | 936.30M | 945.10M |
Cash Flow | |||||
| Free Cash Flow | -137.40M | -8.50M | 12.80M | -71.10M | -15.70M |
| Operating Cash Flow | -42.10M | 49.70M | 65.20M | -25.70M | 30.80M |
| Investing Cash Flow | -88.30M | -69.70M | -43.80M | -177.40M | -52.10M |
| Financing Cash Flow | 360.70M | 277.60M | -30.70M | -63.30M | -9.30M |
Kratos Defense Technical Analysis
Negative
70.34
Price Trends
86.86
Negative
87.36
Negative
79.29
Negative
Market Momentum
-5.47
Positive
40.91
Neutral
46.05
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTOS, the sentiment is Negative. The current price of 70.34 is below the 20-day moving average (MA) of 78.09, below the 50-day MA of 86.86, and below the 200-day MA of 79.29, indicating a bearish trend. The MACD of -5.47 indicates Positive momentum. The RSI at 40.91 is Neutral, neither overbought nor oversold. The STOCH value of 46.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KTOS.
Kratos Defense Risk Analysis
Kratos Defense disclosed 67 risk factors in its most recent earnings report. Kratos Defense reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kratos Defense Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $12.24B | 32.53 | 10.54% | 1.04% | 12.27% | 33.16% | |
68 Neutral | $15.91B | 17.04 | 12.25% | 0.09% | 1.83% | -0.73% | |
67 Neutral | $15.53B | 22.09 | 12.28% | 1.53% | 2.60% | -18.22% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
52 Neutral | $13.18B | 606.55 | 1.20% | ― | 14.00% | 23.78% | |
51 Neutral | $8.97B | -21.68 | -6.41% | ― | 79.89% | -171.81% |
* Industrials Sector Average
KTOS
Kratos Defense
70.34
37.36
113.25%
AVAV
AeroVironment
179.72
36.92
25.85%
HII
Huntington Ingalls
394.41
178.49
82.66%
DRS
Leonardo Drs
46.06
10.88
30.91%
TXT
Textron
91.39
25.46
38.62%
Kratos Defense Corporate Events
Business Operations and StrategyExecutive/Board Changes
Kratos Defense Adds Veteran Executive to Board, Audit Committee
Positive
Mar 25, 2026
On March 23, 2026, Kratos Defense Security Solutions appointed veteran aerospace and defense executive David King to its Board of Directors and to the Board’s Audit Committee, following a recommendation from the Nominating and Corporate Gov...
Delistings and Listing ChangesM&A Transactions
Kratos Defense Completes Cash Acquisition of Orbit Technologies
Positive
Mar 6, 2026
Kratos Defense Security Solutions completed the acquisition of Israeli firm Orbit Technologies Ltd. on March 2, 2026, following a merger agreement initially signed on November 4, 2025. Orbit, previously listed on the Tel Aviv Stock Exchange, now ...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Kratos Defense Completes Public Equity Offering to Expand
Positive
Mar 2, 2026
On February 26, 2026, Kratos Defense Security Solutions entered an underwriting agreement to sell 14,285,714 common shares in a firm-commitment public offering, with underwriters granted a 30-day option for an additional 2,142,857 shares. The opt...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.