Kratos Defense & Security Solutions, Inc.
$58.43
-7.6%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 offers microwave electronic products, space and satellite communications, training and cybersecurity/ warfare, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne systems. It serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is elevated (P/E 449.5).
Valuation inputs: P/E 449.5, earnings yield +0.2%, momentum -7.6%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is soft (ROE +1.1%, ROIC +0.8%).
Profitability stack: net margin +1.6%, ROE +1.1%, ROIC +0.8%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +19.1%, momentum -7.6%, net margin +1.6%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Kratos Defense & Security Solutions, Inc. Market vs Earnings Trajectory
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Kratos Defense & Security Solutions, Inc. Fair Value Envelope
Kratos Defense & Security Solutions, Inc. Profit Bridge
Profitability Analysis
Gross Margin
Moderate margins typical of competitive industries. Monitor for pricing pressure or rising costs.
Operating Margin
Minimal operating profit suggests high operating costs or pricing challenges. Scalability is concerning.
Net Profit Margin
Minimal profitability after all expenses. Limited financial flexibility for reinvestment or shareholder returns.
Effective Tax Rate
Higher tax burden may reflect limited tax optimization or operations in high-tax jurisdictions.
Profitability Insight
Room for improvement: Moderate profitability with opportunities to enhance margins through better cost management or pricing strategy.
Kratos Defense & Security Solutions, Inc. Cash Conversion Engine
Cash Flow Quality Analysis
FCF Conversion Rate
Negative free cash flow despite positive earnings raises concerns about cash generation ability or heavy capital requirements.
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Significant FCF decline raises concerns. Urgent review needed of operational performance and capital allocation.
Working Capital Impact
Significant working capital drain. Growth may be consuming cash through inventory buildup or receivables extension—monitor closely.
Cash Flow Quality Insight
Cash flow concerns: Despite profitability, the company is burning cash. Review working capital management, CapEx levels, and sustainability of current operations.
Kratos Defense & Security Solutions, Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Conservative capital structure. The company relies primarily on equity financing, indicating low financial risk.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Balanced asset mix between current and non-current assets, typical of many stable businesses.
Financial Health Insight
Strong financial foundation: Excellent liquidity combined with conservative leverage suggests the company is well-positioned to weather economic uncertainties and fund growth opportunities.
Kratos Defense & Security Solutions, Inc. Street Expectations Map
Wall Street analysts project that KTOS stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 110.00, with estimates ranging from a low of 80.00 to a high of 135.00.
The consensus 1-year price target stands at 110.00, with estimates ranging from a low of 80.00 to a high of 135.00.
Analyst Consensus Analysis
Upside Potential
Substantial upside potential. Analysts see significant value gap, suggesting the stock may be materially undervalued at current levels.
Analyst Agreement
Mixed analyst views. Wide target range suggests differing opinions on key value drivers, growth prospects, or risk factors.
Analyst Conviction
Bearish or uncertain outlook. Limited upside or poor consensus suggests challenges ahead or fundamental concerns.
Market Sentiment Insight
High risk, high reward: Substantial upside potential exists, but wide analyst disagreement signals execution risk or unclear catalysts. Thorough due diligence essential before committing capital.
Kratos Defense & Security Solutions, Inc. Insider Positioning
During the last 12 months, insiders have sold $31.40M worth of KTOS shares, with no buying activity reported.
3 Months
0
0.00
40.1K
2.71M
-2.7M
-$2.71M
3-6 Months
0
0.00
214.4K
17.85M
-17.8M
-$17.85M
6-9 Months
0
0.00
133.6K
9.91M
-9.9M
-$9.91M
9-12 Months
0
0.00
17.2K
924.76K
-925K
-$925K
Top Buyers
No buying activity
Top Sellers
Demarco Eric M
Director, Officer: President & Ceo
$19.36M
Fendley Steven S.
Officer: President, Us Division
$2.53M
Jarvis Scot B
Director
$2.38M
Adelman Jonah
Officer: President, Me Division
$2.24M
Carrai Phillip D
Officer: President, Stc Division
$1.49M
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $31.40M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Recent Trend (3 Months)
Heavy recent selling activity. Recent insider sales notably exceed purchases—may warrant investigation into company developments.
Insider Participation
5 insider sellers vs. 0 buyers. Widespread selling across multiple insiders may signal concerns.
Insider Activity Insight
Multiple red flags: Heavy selling, numerous sellers, and continued recent selling create a concerning pattern. Investigate fundamental drivers and consider whether company guidance or industry conditions have deteriorated.
No Dividend Yield Data
KTOS has not reported any dividend yield values in the available annual periods.
ktos Dividend History
Learning Layer
Related Guides
Build conviction on KTOS by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.