Kratos Defense & Security Solutions, Inc.
- Open
- 46.26
- Day high
- 47.25
- Day low
- 45.59
- Prev close
- 46.96
- Volume
- 4.5M
- Mkt cap
- $8.6B
- P/E (TTM)
- 266.2
- EPS (TTM)
- $0.17
- P/B
- 2.5
- P/S
- 6.1
- Yield
- —
- Per share
- —
- ▼Insiders net selling -$9.3M over the last 3 months (0 open-market buys, 49 sales)
- 🏛Institutions accumulating (13F)
Kratos Defense & Security Solutions, Inc. (KTOS) is a Industrials company listed on NASDAQ. The stock is down 22% over the past year. Over the trailing 3 months, insiders filed 0 open-market buys and 49 sales (SEC Form 4). Drillr has 1 published research article covering KTOS.
Kratos Defense & Security Solutions, Inc. (KTOS) financials & analyst ratings
Fundamentals (TTM)
Analyst consensus · 10 analysts
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
KTOS earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 6, 2026 | $0.13 | $0.16 | +19.2% | $371M | +7.5% |
| Feb 23, 2026 | $0.14 | $0.18 | +28.6% | $345M | -1.3% |
| Nov 4, 2025 | $0.13 | $0.14 | +12.0% | $348M | +8.0% |
| Aug 7, 2025 | $0.10 | $0.11 | +15.8% | $352M | +14.7% |
| Feb 26, 2025 | $0.09 | $0.13 | +44.4% | $283M | -1.8% |
| Nov 7, 2024 | $0.08 | $0.11 | +37.5% | $276M | -5.0% |
| Feb 13, 2024 | $0.08 | $0.12 | +50.0% | $274M | +7.6% |
| Nov 2, 2023 | $0.08 | $0.12 | +50.0% | $275M | +9.1% |
| Aug 3, 2023 | $0.05 | $0.09 | +80.0% | $257M | +8.9% |
| May 3, 2023 | $0.05 | $0.06 | +14.3% | $232M | +3.9% |
| Feb 23, 2023 | $0.07 | $0.08 | +14.3% | $249M | +3.0% |
| Nov 3, 2022 | $0.05 | $0.08 | +60.0% | $229M | +0.8% |
KTOS insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jul 10, 2026 | Carter David Mofficer: President, DRSS Division | Sell | 3,700 | $50.39 |
| Jul 10, 2026 | Carter David Mofficer: President, DRSS Division | Sell | 300 | $51.26 |
| Jul 2, 2026 | Lund Deanna Hdirector, officer: EVP & CFO | Sell | 2,600 | $53.18 |
| Jul 2, 2026 | Lund Deanna Hdirector, officer: EVP & CFO | Sell | 700 | $53.84 |
| Jul 2, 2026 | Rock Stacey Gofficer: President, KTT Division | Sell | 4,675 | $50.00 |
| Jul 2, 2026 | Lund Deanna Hdirector, officer: EVP & CFO | Sell | 500 | $50.89 |
| Jul 2, 2026 | Lund Deanna Hdirector, officer: EVP & CFO | Sell | 1,200 | $52.40 |
| Jul 1, 2026 | Fendley Steven S.officer: President, US Division | Sell | 7,000 | $48.37 |
| Jun 17, 2026 | Carrai Phillip Dofficer: President, STC Division | Sell | 3,600 | $58.00 |
| Jun 17, 2026 | Carrai Phillip Dofficer: President, STC Division | Sell | 2,700 | $57.30 |
| Jun 17, 2026 | Mendoza Marieofficer: SVP & General Counsel | Sell | 100 | $59.45 |
| Jun 17, 2026 | Carrai Phillip Dofficer: President, STC Division | Sell | 200 | $59.09 |
| Jun 17, 2026 | Mendoza Marieofficer: SVP & General Counsel | Sell | 600 | $58.20 |
| Jun 17, 2026 | Mendoza Marieofficer: SVP & General Counsel | Sell | 800 | $57.53 |
| Jun 10, 2026 | Fendley Steven S.officer: President, US Division | Sell | 1,750 | $59.11 |
Source: KTOS SEC Form 4 filings, latest Jul 10, 2026. For informational purposes only — not investment advice.
See the full KTOS insider & 13F page →Kratos Defense & Security Solutions, Inc. company profile
Overview
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a San Diego-based defense technology company that was incorporated in 1994 and went public in 1999. The company operates as a specialized government contractor primarily serving the U.S. Department of Defense, intelligence agencies, and international defense organizations. Kratos has evolved from a traditional defense services provider into a technology-focused company developing cutting-edge unmanned systems, hypersonic technologies, and advanced defense electronics. With over two decades of public trading history, the company has positioned itself as a disruptive force in the defense industry, emphasizing affordable, first-to-market technologies that address modern warfare requirements.
Business
Kratos operates in the aerospace and defense industry, specifically focusing on advanced military technologies and systems integration. The company is structured around two primary business segments that collectively generated $1.14 billion in revenue for fiscal year 2024. The Unmanned Systems segment represents approximately 25-30% of total revenues and focuses on developing and manufacturing unmanned aerial vehicles (UAVs), unmanned ground vehicles, and unmanned maritime systems. The flagship product in this segment is the Valkyrie drone, an AI-enabled, high-performance jet-powered unmanned aircraft designed for military applications. This segment also includes target drones used for military training and testing, which simulate enemy aircraft or missiles to help military forces practice their defensive capabilities. Target drones are expendable aircraft that are intentionally destroyed during training exercises, creating a recurring revenue stream as military forces continuously need replacements. The Kratos Government Solutions (KGS) segment accounts for approximately 70-75% of total revenues and encompasses several specialized technology areas. This includes microwave electronic products that are critical components in radar systems, electronic warfare equipment, and satellite communications. The segment also provides space and satellite communications systems, including ground-based equipment that enables communication with satellites and spacecraft. Additionally, KGS offers C5ISR systems (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance), which are integrated technology platforms that help military commanders gather information and coordinate operations. The segment includes turbine technologies that manufacture small jet engines for drones and missiles, as well as training and cybersecurity services for defense applications. Beyond these core segments, Kratos is heavily investing in emerging technologies including hypersonic systems - vehicles that travel at speeds exceeding five times the speed of sound - and solid rocket motors used in missile propulsion systems. These represent the company's strategic bet on next-generation defense technologies.
Revenue model
Kratos generates revenue primarily through government contracts, operating under several different business models depending on the product or service provided. The company's revenue streams include direct product sales of manufactured goods like drones and electronic components, long-term service contracts for system maintenance and support, and development contracts where the government pays for research and engineering work on new technologies. The primary customers are U.S. government agencies, particularly the Department of Defense, intelligence agencies, and classified government organizations. International customers include NATO allies and other friendly foreign governments, representing approximately 20% of quarterly revenues. The company also serves some commercial customers, particularly in the satellite communications market, though this represents a smaller portion of overall business. Kratos operates under both cost-plus and fixed-price contract structures. Cost-plus contracts provide more predictable margins as the government reimburses actual costs plus a predetermined profit margin. Fixed-price contracts can offer higher profit potential but expose the company to cost overrun risks, particularly problematic when dealing with supply chain disruptions and inflation. Several factors significantly impact the company's margins and profitability. Positive margin drivers include the renewal of fixed-price contracts at higher rates to reflect current cost structures, leveraging fixed costs across growing revenue bases, and the company's vertical integration strategy that reduces dependence on external suppliers. The transition toward higher-margin software and technology products, particularly in space and satellite systems, also supports margin expansion. Negative margin pressures stem from supply chain disruptions and component cost inflation, which particularly impact fixed-price contracts where Kratos cannot pass through cost increases. The tight labor market for specialized engineers and technical personnel drives up compensation costs. Additionally, the company's heavy investment in research and development for emerging technologies like hypersonics requires significant upfront spending before revenue materialization. Government budget uncertainties, including continuing resolutions that delay contract awards and payments, also create cash flow and margin pressures.
Competitive moat
Kratos operates in a specialized niche within the defense industry that provides some competitive advantages, though the company's moat is moderate rather than exceptionally strong. The company's primary competitive advantages stem from its technical expertise in highly specialized areas like hypersonic systems, unmanned aerial vehicles, and microwave electronics. These technologies require significant engineering knowledge, security clearances, and established relationships with government customers that create barriers to entry for new competitors. The company benefits from regulatory barriers inherent in defense contracting, including security clearance requirements, ITAR (International Traffic in Arms Regulations) compliance, and the extensive qualification processes required to become an approved government supplier. These factors make it difficult for new entrants to quickly establish themselves in Kratos' markets. However, the company's moat faces several challenges. Kratos competes against much larger defense contractors like Lockheed Martin, Raytheon, and Boeing, which have significantly greater financial resources, broader customer relationships, and more extensive manufacturing capabilities. These larger competitors can potentially outbid Kratos on major programs or develop competing technologies with greater investment. The defense industry's shift toward commercial-off-the-shelf solutions and the Pentagon's emphasis on working with non-traditional defense contractors has lowered some barriers to entry. Technology companies from Silicon Valley and other commercial sectors are increasingly competing for defense contracts, potentially disrupting traditional defense contractors' advantages. Additionally, Kratos' focus on "affordable" and "attritible" systems, while strategically sound, inherently limits pricing power compared to traditional high-value defense systems. The company's success depends heavily on government budget priorities and program funding, which can shift with changing political administrations and strategic priorities. Overall, while Kratos has carved out defensible niches in specialized technologies, its competitive position requires continuous innovation and execution to maintain against both traditional and emerging competitors.
Risks & safety
Kratos presents a moderate margin of safety profile with some concerning elements that require careful monitoring. **Cash and Liquidity Position:** - Strong cash position of $263.7 million as of Q1 2025 - Current ratio of 2.84, indicating solid short-term liquidity - However, negative free cash flow of -$51.8 million in Q1 2025 and -$8.5 million for full year 2024 - Operating cash flow volatility, ranging from -$29.2 million in Q1 2025 to +$49.7 million for full year 2024 **Debt and Solvency:** - Low debt-to-equity ratio of 0.08, indicating minimal leverage risk - Total debt represents only about 8% of equity, providing significant financial flexibility - Strong balance sheet with $1.39 billion in shareholders' equity **Valuation Metrics:** - Extremely high EV/EBITDA ratio of 167.6x based on Q1 2025 EBITDA, indicating potential overvaluation - Price-to-book ratio of 3.30x, suggesting premium valuation relative to book value - Graham number of 2.43, well below current trading price, indicating potential overvaluation by traditional value metrics **Other Considerations:** - Lumpy cash flow generation typical of government contracting business - Heavy R&D investment requirements for emerging technologies may continue pressuring near-term cash flows - Strong order backlog and pipeline provide some revenue visibility
Recent development
Over the past few years, Kratos has undergone a significant strategic transformation from a traditional defense services company to a technology-focused developer of cutting-edge defense systems. The company has made substantial investments in several key growth areas that represent the future of military technology. The most significant development has been Kratos' aggressive push into hypersonic systems, which the company views as its primary long-term growth driver. The company has successfully conducted test flights of its Erinyes hypersonic glide vehicle and completed initial missions with its Dark Fury hypersonic vehicle. Management projects this business could generate $50-100 million in incremental revenue by 2025, scaling to $150-200 million annually by 2027. In unmanned systems, Kratos has continued advancing its Valkyrie drone program, with successful AI-enabled test flights and ongoing development of advanced features like internal landing gear. The company has also expanded its target drone business, which has shown consistent growth and provides a stable revenue base. Management sees potential for a significant tactical drone business, though they characterize this as a "call option" rather than a base case assumption. The company has made strategic moves to expand its propulsion and engine capabilities, including a partnership with General Electric Aerospace for small jet engine production and the development of new turbo-fan engine production facilities. The turbine technologies business has shown record performance, growing from $70-75 million to over $100 million in annual revenue. Kratos has also formed the Prometheus Joint Venture with Rafael Advanced Defense Systems, a 50/50 partnership focused on solid rocket motors and energetics manufacturing. This joint venture includes a new manufacturing facility in Indiana and represents a significant expansion into missile propulsion systems. The company has been aggressively expanding its manufacturing footprint, with new facilities planned or under construction in Israel, Oklahoma, India, and potentially a new hypersonic campus. This expansion supports the company's vertical integration strategy and positions it to handle increased production volumes across multiple product lines.
KTOS company profile · for informational purposes only — not investment advice.
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