Kratos Defense & Security Solutions
KTOS
$55.34
+6.69%
Kratos Defense & Security Solutions, Inc. is a technology company that develops and fields transformative, affordable technology, platforms, and systems for the aerospace and defense industry, operating through two primary segments: Kratos Government Solutions (KGS) and Unmanned Systems. The company is a niche player and emerging leader in unmanned aerial systems and drone technology, positioning itself as a key supplier in the rapidly growing defense tech space. Currently, the investor narrative is centered on the potential for increased government investment in drone manufacturing and counter-drone capabilities, as highlighted by recent news of a UK drone investment and speculative reports of U.S. government stakes in drone companies. However, the stock has faced significant volatility, with a sharp decline from its 52-week high, driven by concerns over defense demand following a potential U.S.-Iran peace deal and broader market sell-offs, creating a debate about whether the pullback represents a buying opportunity or a fundamental shift in sentiment.…
KTOS
Kratos Defense & Security Solutions
$55.34
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KTOS 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Kratos Defense & Security Solutions's 12-month outlook, with a consensus price target around $108.62 and implied upside of +96.3% versus the current price.
Average Target
$108.62
0 analysts
Implied Upside
+96.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$60 - $150
Analyst target range
The stock is covered by 21 analysts, with a consensus recommendation of 'Strong Buy' and a mean recommendation score of 1.48 (where 1 is Strong Buy and 5 is Sell). The average target price is $109.33, implying an upside of 134.6% from the current price of $46.60. The target range is wide, from a low of $60.00 to a high of $150.00, indicating significant uncertainty about the stock's future. The high target of $150.00 assumes a recovery to near the 52-week high, likely driven by successful execution on drone contracts and a rebound in defense spending. The low target of $60.00 suggests a more conservative scenario, possibly reflecting continued margin pressure or a slowdown in defense demand. Recent ratings actions show a mix of upgrades and reiterations, with JP Morgan upgrading from Neutral to Overweight in June 2026 and Jefferies upgrading from Hold to Buy in April 2026, while others like Piper Sandler and BNP Paribas remain Neutral, indicating a generally positive but cautious sentiment among analysts.
KTOS Technical Analysis
KTOS is in a pronounced downtrend, with the stock price at $46.60 as of July 31, 2026, down 20.6% over the past year and 54.8% over the past six months. The current price sits at 34.8% of its 52-week range (between $43.09 low and $134.00 high), indicating it is trading near the lower end of its range, which typically suggests either a value opportunity or a falling knife. The stock has underperformed the S&P 500 significantly, with relative strength of -38.8% over the past year, and the 52-week high of $134.00 was reached in early 2026, followed by a sharp sell-off.
Beta
1.11
1.11x market volatility
Max Drawdown
-66.4%
Largest decline past year
52-Week Range
$43-$134
Price range past year
Annual Return
-6.8%
Cumulative gain past year
| Period | KTOS Return | S&P 500 |
|---|---|---|
| 1m | +3.4% | +2.5% |
| 3m | -2.9% | +5.2% |
| 6m | -41.4% | +11.5% |
| 1y | -6.8% | +22.6% |
| ytd | -30.2% | +12.9% |
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KTOS Fundamental Analysis
Revenue has been growing strongly, with Q1 2026 revenue of $371 million, up 22.6% year-over-year, and the company has shown consistent sequential growth from $302.6 million in Q1 2025 to $345.1 million in Q4 2025 and $371 million in Q1 2026. The growth is driven by both product and service segments, with product revenue at $237 million and service revenue at $134 million in the latest quarter. However, profitability remains thin, with net income of $11.9 million in Q1 2026, a net margin of 3.2%, and gross margin of 22.6%, which is stable but low for the aerospace and defense industry, where gross margins typically range from 25-30%. The company has been consistently profitable over the past year, but earnings are volatile, with Q4 2025 net income of $5.9 million and Q2 2025 net income of $2.9 million, indicating a gradual improvement in profitability.
Quarterly Revenue
$371000000.0B
2026-03
Revenue YoY Growth
+22.6%
YoY Comparison
Gross Margin
22.6%
Latest Quarter
Free Cash Flow
$-134000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is KTOS Overvalued?
Given that net income is positive, the primary valuation metric is the P/E ratio. The trailing P/E is 595.9x, while the forward P/E is 42.7x, indicating that the market expects significant earnings growth in the coming year. The gap between trailing and forward P/E suggests that the market is pricing in a substantial improvement in earnings, which is supported by analyst estimates of EPS of $2.46 for the next fiscal year. Compared to the industry average P/E of approximately 20x for aerospace and defense, KTOS trades at a massive premium, with a trailing P/E of 595.9x versus the industry average of 20x, a 2,879% premium, and even the forward P/E of 42.7x is 113% above the industry average. This premium is justified by the company's high growth potential in the drone market, but it also implies high expectations that may be difficult to meet. Historically, the stock's P/E has ranged from negative values in 2022-2023 to as high as 682.75x in Q2 2021, and the current trailing P/E of 595.9x is near the upper end of its historical range, suggesting that the market is pricing in optimistic expectations for future growth.
PE
595.9x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 99x~683x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
124.6x
Enterprise Value Multiple