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1. Company Snapshot

1.a. 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 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.

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1.b. Last Insights on KTOS

Breaking News: Kratos Defense & Security Solutions Inc has seen significant developments recently. The company's OpenSpace Platform has been deployed by SSC Space as part of its new service, SSC Space Go, which provides data access for small satellites in Low Earth Orbit. This comes amid a surge in defense stocks, including Kratos, Lockheed Martin, and L3Harris, due to the ongoing US-Iran conflict. No recent earnings release data is available. Based on the news, some analysts might recommend a buy, given the company's expanding presence in the satellite data market and its role in national security.

1.c. Company Highlights

2. Kratos Defense & Security Solutions Exceeds Q4 Expectations

Kratos Defense & Security Solutions reported a strong Q4 2025, with revenues reaching $345.1 million, surpassing the estimated range of $320 million to $330 million. The company's earnings per share (EPS) came in at $0.18, beating analyst estimates of $0.14. The robust financial performance was driven by significant contributions from its space and satellite, Turbine Technologies, C5ISR, and Microwave Products businesses. Kratos' organic growth rate and financial results reflect the increasing demand for its affordable military-grade hardware and software.

Publication Date: Feb -25

📋 Highlights
  • Record Backlog:: Kratos achieved a record backlog of $1.573 billion, reflecting strong demand for military-grade solutions.
  • Hypersonic Growth:: Hypersonic franchise revenue to double to $400 million in 2026 and increase 75% to $700 million in 2027.
  • Space & Satellite Milestone:: Secured a $500 million program and expects higher margins in Q4 2026 from software-defined satellite contracts.
  • Drone Dominance Award:: Received a $1 billion award for small lethal drones over two years, accelerating tactical drone production.
  • Capital Expenditures:: 2026 CapEx forecast at $135–145 million, including $30–35 million rolled over from 2025 for hypersonic and unmanned systems.

Operational Highlights

The company achieved several operational milestones, including the successful completion of a factory acceptance testing between Kratos' Epic command and control software system and Airbus OneSat next-generation software-defined satellite platform. Kratos was also selected by the Pentagon to develop highly maneuverable Mach 5+ hypersonic missiles and expects to receive an additional $1 billion-plus hypersonic program-related opportunity by the end of the year. The company's hypersonic franchise is expected to ramp rapidly, driven by demand for its Zeus SRMs.

Guidance and Outlook

Kratos provided financial guidance for Q1 and full-year 2026, with expectations of revenue growth driven by its hypersonic, space, and satellite businesses. The company anticipates doubling its hypersonic revenue in 2026 to approximately $400 million and potentially increasing by 75% again in 2027 to approximately $700 million. Analysts estimate next year's revenue growth at 21.8%.

Valuation Metrics

To understand what's priced into Kratos' stock, we can examine its valuation metrics. The company has a P/E Ratio of 702.77, P/B Ratio of 7.74, and P/S Ratio of 11.47. Additionally, its EV/EBITDA is 214.11. These metrics suggest that the market has high expectations for Kratos' future growth, particularly in its hypersonic and space businesses. As Eric DeMarco noted, "Kratos is the most valuable defense company in the industry, private or public," reflecting the market's confidence in the company's business plan and growth prospects.

Growth Drivers

Kratos' growth is driven by several factors, including its hypersonic franchise, space and satellite business, and Microwave Electronics business. The company is well-positioned to capitalize on the increasing demand for affordable military-grade hardware and software, with a strong backlog of $1.573 billion. Kratos' strategy of being first to market with relevant products is a differentiator, and its operational updates, including the expansion of its Birmingham advanced manufacturing facility, position it for long-term success.

3. NewsRoom

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Defiance ETFs CIO Sylvia Jablonski on finding opportunities amid Iran conflict

Mar -03

Source: youtube.com

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Kratos Receives $7 Million Order for Counter-UAS Systems

Mar -03

Source: globenewswire.com

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SSC Space Deploys Kratos' OpenSpace® Platform in its New Service for LEO Missions: SSC Space Go

Mar -02

Source: globenewswire.com

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Kratos Defense Surges Over 10%: LMT, L3Harris Other Defense Stocks Climb In Pre-Market Amid US-Iran War

Mar -02

Source: feeds.benzinga.com

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Is U.S. Diplomacy Dead? The New Era of American Power In 2026

Mar -01

Source: investorplace.com

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Kratos Defense & Security Solutions, Inc. $KTOS Shares Sold by Artisan Partners Limited Partnership

Feb -28

Source: defenseworld.net

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Why Kratos Defense Stock Keeps Going Down

Feb -27

Source: fool.com

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Mach 2 and Beyond: Aerospace Enters Its Biggest Spending Cycle

Feb -27

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.41%)

6. Segments

Kratos Government Solutions

Expected Growth: 7%

Kratos Government Solutions' 7% growth is driven by increasing demand for cybersecurity, satellite communications, and unmanned systems. The segment benefits from its diversified portfolio, strong relationships with government agencies, and strategic acquisitions. Additionally, growing investments in digital modernization, cloud computing, and artificial intelligence across the US defense sector contribute to its growth momentum.

Unmanned Systems

Expected Growth: 9%

Kratos Defense & Security Solutions' Unmanned Systems segment growth is driven by increasing demand for autonomous systems in military and commercial applications, advancements in drone technology, and rising adoption of unmanned systems for surveillance, reconnaissance, and combat missions. Additionally, government investments in defense modernization and the need for cost-effective solutions contribute to the segment's 9% growth.

7. Detailed Products

Unmanned Systems

Kratos Defense & Security Solutions, Inc. offers a range of unmanned systems, including drones and unmanned aerial vehicles (UAVs), designed for military, surveillance, and reconnaissance applications.

Satellite Communications

Kratos provides satellite communications solutions, including satellite terminals, modems, and network infrastructure, for government and commercial customers.

Cybersecurity

Kratos offers a range of cybersecurity solutions, including penetration testing, vulnerability assessment, and incident response, to protect against cyber threats.

Training and Simulation

Kratos provides training and simulation solutions, including virtual reality and live-fire ranges, for military and law enforcement agencies.

Electronic Warfare

Kratos offers electronic warfare solutions, including radar and communication systems, for military and defense applications.

C5ISR (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance)

Kratos provides C5ISR solutions, including command and control systems, for military and defense applications.

8. Kratos Defense & Security Solutions, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Kratos Defense & Security Solutions, Inc. has a low threat of substitutes due to its specialized products and services in the defense and security industry.

Bargaining Power Of Customers

Kratos Defense & Security Solutions, Inc. has a medium bargaining power of customers due to the presence of a few large customers in the defense and security industry.

Bargaining Power Of Suppliers

Kratos Defense & Security Solutions, Inc. has a low bargaining power of suppliers due to its diversified supplier base and lack of dependence on a single supplier.

Threat Of New Entrants

Kratos Defense & Security Solutions, Inc. has a high threat of new entrants due to the increasing demand for defense and security products and services, making it an attractive market for new entrants.

Intensity Of Rivalry

Kratos Defense & Security Solutions, Inc. operates in a moderately competitive industry, with a few established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.25%
Debt Cost 7.97%
Equity Weight 80.75%
Equity Cost 7.97%
WACC 7.97%
Leverage 23.84%

11. Quality Control: Kratos Defense & Security Solutions, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Spirit AeroSystems

A-Score: 5.0/10

Value: 9.6

Growth: 1.1

Quality: 5.2

Yield: 0.0

Momentum: 7.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
AeroVironment

A-Score: 5.0/10

Value: 6.9

Growth: 6.1

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Kratos Defense

A-Score: 4.5/10

Value: 2.4

Growth: 5.2

Quality: 5.9

Yield: 0.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Hexcel

A-Score: 4.3/10

Value: 1.6

Growth: 4.3

Quality: 4.3

Yield: 1.0

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
AAR

A-Score: 4.2/10

Value: 4.8

Growth: 4.8

Quality: 3.1

Yield: 0.0

Momentum: 7.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Leonardo DRS

A-Score: 4.1/10

Value: 2.3

Growth: 3.7

Quality: 6.2

Yield: 1.0

Momentum: 5.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

89.13$

Current Price

89.13$

Potential

-0.00%

Expected Cash-Flows