Kratos Defense & Security Solutions, Inc. (KTOS) AI Stock Analysis

Kratos Defense & Security Solutions, Inc. develops advanced technological solutions primarily for the U.S. Department of Defense, intelligence agencies, and international government and commercial clients. The company operates through two segments: Kratos Government Solutions and Unmanned Systems. Its Government Solutions segment offers microwave electronic products, space and satellite communications, cybersecurity, combat training, modular C5ISR systems, turbine technologies, and rocket support services. Its Unmanned Systems segment produces unmanned aerial systems, as well as ground and seaborne platforms, providing surveillance, reconnaissance, and mission-critical capabilities for national security operations.

Kratos grew annual revenue from $811.5M in FY2021 to $1.35B in FY2025, representing a 5-year revenue CAGR of 12.5%. Net income turned positive in recent periods, rising from -$36.9M in FY2022 to $16.3M in FY2024 and $22.0M in FY2025. Gross margin contracted over this timeframe, decreasing from 27.7% in FY2021 to 22.1% in FY2025. For the trailing twelve months ended June 30, 2026, operating margin stood at -0.2% on $1.52B of revenue. In the latest quarter ended June 30, 2026, quarterly revenue grew 30.5% year-over-year, while quarterly earnings increased 7.4% year-over-year.

As of June 30, 2026, Kratos held $1.44B in cash and short-term investments against $193.6M in total debt, yielding a net cash position of $1.24B. The company maintained a current ratio of 5.54 and a debt-to-equity ratio of 0.06 alongside $3.43B in shareholders equity. Operating cash flow in FY2025 was -$42.1M, and free cash flow stood at -$137.4M following $95.3M in capital expenditures. Share count expanded by 52.2% over a 5-year period.

Kratos trades at a trailing price-to-earnings multiple of 237.8x and a forward P/E of 45.2x, compared to medians of 24.8x and 17.2x for its US-listed Industrials peer group. The stock's price-to-sales ratio is 5.0x versus the peer median of 1.5x, and its EV-to-EBITDA stands at 64.0x compared to the peer median of 13.9x. Over the past year, Kratos shares declined 54.4%, whereas the S&P 500 generated a gain of 16.8%. The stock also trades 39.8% below its 200-day moving average.

Wall Street coverage includes 17 Strong Buy ratings, 6 Buy ratings, and 1 Hold rating, with no Sell or Strong Sell ratings. The consensus mean price target is $98.33, implying an upside of 143.3% from the last closing price of $40.42. For the fiscal year ending December 31, 2026, analysts estimate revenue of $1.79B and EPS of $0.81. Kratos exceeded EPS expectations in each of the last 4 quarters, and its next earnings release is scheduled for November 3, 2026.

This page is an AI-written research summary of Kratos Defense & Security Solutions, Inc. (KTOS). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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