Kratos is experiencing accelerating revenue growth, driven by strong demand for its unmanned systems, with Q2 2026 revenue up 30.5% YoY to $458.8M. However, profitability remains strained, as operating income turned negative (-$1.6M) and gross margins compressed to 21.8% from 24.3% a year earlier.
Price trend, volume and key moving averages
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Revenue surged 30.5% YoY to $458.8M in Q2 2026, but gross margin fell to 21.8% and operating income turned negative at -$1.6M, indicating margin pressure from mix shift and rising SG&A (up 45.7% YoY).
Multiple bullish theses on Kratos Defense & Security Solutions, Inc. have been published on Substack platforms like Stock Analysis Compilation and MTC.
Kratos specializes in advanced defense technologies including unmanned aircraft, propulsion systems, microwave electronics, and satellite ground systems for U.S. and allied forces.
A.L. Capital Advisory's DCF model suggests significant upside potential with a bull case intrinsic value of $118 compared to recent trading prices around $54-$87.
Trailing total returns as of 11/7/2026, which may include dividends or other distributions. Benchmark is S&P 500 (^GSPC).
Check whether operating performance supports the current valuation.
Recent results and news deserve attention only when they alter the forward view.
| Quarter | EPS (Act vs Est) | Revenue (Act vs Est) |
|---|---|---|
Q4 2026Latest Nov 5, 2026 | $0.24+15.7% vs $0.21 | $472M+0.1% vs $471M |
Q3 2026 Aug 4, 2026 | $0.21+51.3% vs $0.14 | $459M+11.8% vs $410M |
Q2 2026 May 6, 2026 | $0.16+19.2% vs $0.13 | $371M+7.5% vs $345M |
Q1 2026 Feb 23, 2026 | $0.18+14.0% vs $0.16 | $345M+5.5% vs $327M |
Kratos Defense & Security Solutions is trading below its 5-year average valuation despite doubling its historical growth rate. KTOS boasts a strong financial position with $1.4 billion in cash, no debt, and a growing backlog of $2.6 billion. Risks include execution challenges from rapid expansion, potential contract delays due to government budget cycles, and continued depressed valuation.
Kratos Defense & Security Solutions, Inc. is experiencing strong revenue growth, driven by robust demand, a growing backlog, and recent acquisitions. Despite high current valuation multiples and negative free cash flow due to heavy investment, KTOS expects margin and FCF improvement as investments mature. Long-term KTOS potential is supported by government contracts, a $2.65 billion backlog, and anticipated 20% revenue CAGR, but stock-based compensation and high multiples temper near-term appeal.
Kratos Defense & Security Solutions, Inc. ( KTOS ) Q3 2026 Earnings Call November 5, 2026 5:00 PM EST Company Participants Marie Mendoza - Senior VP, General Counsel & Secretary Eric DeMarco - CEO, President & Director Deanna Lund - Executive VP, CFO & Director Conference Call Participants Colin Canfield - Cantor Fitzgerald & Co., Research Division Peter Arment - Robert W. Baird & Co. Incorporated, Research Division Joshua Sullivan - JonesTrading Institutional Services, LLC, Research Division Michael Ciarmoli - Guggenheim Securities, LLC, Research Division Jonathan Siegmann - Stifel, Nicolaus & Company, Incorporated, Research Division Anthony Valentini - Barclays PLC Michael Crawford - B.
KTOS' Q3 earnings beat estimates as revenues surge 35.7%, driven by Government Solutions growth, while a rising backlog supports its outlook.
Benchmark KTOS against direct peers instead of judging its metrics in isolation.
Key metrics vs top competitors for Kratos Defense & Security Solutions, Inc. (KTOS)
| Company | Price | Market Cap | P/E Ratio | Rev Growth (1Y) | Net Margin | ROE | Div Yield |
|---|---|---|---|---|---|---|---|
| $35.10 | $6.58B | 270.00 | 18.52% | 1.63% | 1.31% | — | |
| $112.76 | $5.71B | -20.88 | 140.89% | -10.13% | -4.64% | — | |
| $4.04 | $488.22M | -6.73 | 459.81% | -189.21% | -34.19% | — | |
| $5.93 | $5.83B | -5.25 | 39183.09% | -755.11% | -58.25% | — | |
| $4.44 | $3.37B | -4.48 | — | -11589.86% | -40.74% | — | |
| $611.16 | $13.5B | 25.30 | 10.89% | 5.55% | 12.37% | — |
Kratos Defense & Security Solutions, Inc. (KTOS) vs competitors — business, growth, and fundamentals comparison against the closest industry rivals.
Verify the primary filings, follow material updates, and answer the remaining questions.
Kratos Defense & Security Solutions, Inc. (KTOS) SEC filings — annual & quarterly reports (10-K, 10-Q)
Aug 4, 2026·SEC
May 15, 2026·SEC
May 6, 2026·SEC
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Kratos Defense & Security Solutions, Inc. (KTOS) stock FAQ — growth, dividends, profitability & financials explained
Kratos Defense & Security Solutions, Inc. (KTOS) reported $1.52B in revenue over the trailing twelve months. Revenue was $1.35B in fiscal year 2025. That is 2495% more than the $51.9M of fiscal year 1998.
Kratos Defense & Security Solutions, Inc. (KTOS) grew revenue by 18.5% in fiscal year 2025, compared with the prior fiscal year.
Yes. Kratos Defense & Security Solutions, Inc. (KTOS) earned $30.9M in net income over the trailing twelve months (a 2.0% net margin).
Kratos Defense & Security Solutions, Inc. (KTOS) had a return on equity (ROE) of 1.3% in fiscal year 2025. That is below the market's typical 10-15%.
Kratos Defense & Security Solutions, Inc. (KTOS) had negative free cash flow of $128.9M over the trailing twelve months.
