Upside case
Bull case
$103+66.8%
KTOS would need investors to value it at roughly 132x earnings — about 53x more generous than today's 79x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewBuyUpdated May 1, 2026
Kratos Defense & Security Solutions, Inc. (KTOS) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Buy
Covering
22
analysts
19 bullish · 0 bearish · 22 covering KTOS
Strong Buy
1
Buy
18
Hold
3
Sell
0
Strong Sell
0
Consensus Target
$111
+79.7% vs today
Scenario Range
— – $103
Model bear to bull value window
Coverage
22
Published analyst ratings
Valuation Context
79.3x
Forward P/E · Market cap $11.5B
KTOS price targets
Three scenarios for where KTOS stock could go
Current
~$62
Confidence
65 / 100
Updated
May 1, 2026
Where we are now
Current · $62
Base
$36
Bull
$103
Market caseClosest to today
Base case
$36-41.4%
At 46x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
—
The bear case reflects a scenario where earnings shortfalls or multiple compression combine to materially reduce the stock from its current level.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Kratos Defense & Security Solutions, Inc.
KTOS · NASDAQIndustrialsAerospace & DefenseDecember year-end
Kratos Defense & Security Solutions is a specialized defense contractor focused on high-performance unmanned systems and critical national security technologies. It generates revenue primarily through government contracts — roughly 60% from unmanned systems like aerial target drones and tactical drones, and 40% from government solutions including microwave electronics, satellite communications, and cybersecurity services. The company's moat lies in its deep expertise in high-speed, attritable unmanned systems and its established position as a trusted supplier to the U.S. Department of Defense and intelligence agencies.
Market Cap
$11.5B
Revenue TTM
$1.4B
Net Income TTM
$29M
Net Margin
2.1%
KTOS Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
100%Exceptional
12 quarters tracked
Revenue Beat Rate
83%Exceptional
vs consensus estimates
Avg EPS Surprise
+45.5%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Last 4 Quarters
EPS beats: 4 of 4Q2 2025
EPS
$0.12/$0.09
Revenue
$303M/$292M
Q3 2025
EPS
$0.11/$0.10
Revenue
$352M/$306M
Q4 2025
EPS
$0.14/$0.13
Revenue
$348M/$322M
Q1 2026
EPS
$0.18/$0.16
Revenue
$345M/$327M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q2 2025 | $0.12/$0.09 | +33.3% | $303M/$292M | +3.5% |
| Q3 2025 | $0.11/$0.10 | +15.8% | $352M/$306M | +14.7% |
| Q4 2025 | $0.14/$0.13 | +12.0% | $348M/$322M | +8.0% |
| Q1 2026 | $0.18/$0.16 | +14.0% | $345M/$327M | +5.5% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$1.6B
+19.2% YoY
FY2
$1.9B
+17.9% YoY
EPS Outlook
FY1
$0.40
+213.4% YoY
FY2
$0.45
+13.3% YoY
Trailing FCF (TTM)-$133M
FCF Margin: -9.4%
Next Earnings
May 6, 2026
Expected EPS
$0.13
Expected Revenue
$345M
KTOS beat EPS estimates in 4 of 4 tracked quarters. A perfect track record raises the bar for the upcoming report.
KTOS Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $1.3B
Product Mix
Latest annual revenue by segment or product family
Product
65.2%
+23.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
UNITED STATES
79.1%
+18.5% YoY
Tap, hover, or focus a slice to inspect segment detail.
Product is the largest disclosed segment at 65.2% of FY 2025 revenue, up 23.1% YoY.
UNITED STATES is the largest reported region at 79.1%, up 18.5% YoY.
KTOS Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Overvalued
Fair value est. $15 — implies -75.7% from today's price.
Premium to Fair Value
75.7%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
KTOS
473.2x
vs
S&P 500
25.2x
+1776% premium
vs Industrials Trailing P/E
KTOS
473.2x
vs
Industrials
25.9x
+1729% premium
vs KTOS 5Y Avg P/E
Today
473.2x
vs
5Y Average
—
Benchmark unavailable
Forward PE
79.3x
S&P 500
19.1x
+316%
Industrials
20.8x
+281%
5Y Avg
—
—
Trailing PE
473.2x
S&P 500
25.2x
+1776%
Industrials
25.9x
+1729%
5Y Avg
—
—
PEG Ratio
—
S&P 500
1.75x
—
Industrials
1.59x
—
5Y Avg
—
—
EV/EBITDA
128.2x
S&P 500
15.3x
+740%
Industrials
13.9x
+823%
5Y Avg
41.7x
+207%
Price/FCF
—
S&P 500
21.3x
—
Industrials
20.6x
—
5Y Avg
—
—
Price/Sales
8.6x
S&P 500
3.1x
+173%
Industrials
1.6x
+439%
5Y Avg
4.1x
+108%
Dividend Yield
—
S&P 500
1.88%
—
Industrials
1.24%
—
5Y Avg
—
—
| Metric | KTOS | S&P 500 | Industrials | 5Y Avg KTOS |
|---|---|---|---|---|
| Forward PE | 79.3x | 19.1x+316% | 20.8x+281% | — |
| Trailing PE | 473.2x | 25.2x+1776% | 25.9x+1729% | — |
| PEG Ratio | — | 1.75x | 1.59x | — |
| EV/EBITDA | 128.2x | 15.3x+740% | 13.9x+823% | 41.7x+207% |
| Price/FCF | — | 21.3x | 20.6x | — |
| Price/Sales | 8.6x | 3.1x+173% | 1.6x+439% | 4.1x+108% |
| Dividend Yield | — | 1.88% | 1.24% | — |
KTOS trades above S&P 500 benchmarks on 4 of 4 measured multiples — commands a broad premium across most valuation dimensions.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolKTOS Financial Health
Verdict
Adequate
Key financial metrics for KTOS are shown below.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$1.4B
Revenue Growth
TTM vs prior year
+21.8%
Gross Margin
Gross profit as a share of revenue
18.3%
Operating Margin
Operating income divided by revenue
1.8%
Net Margin
Net income divided by revenue
2.1%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$0.16
Free Cash Flow (TTM)
Cash generation after capex
-$133M
FCF Margin
FCF as share of revenue — the primary cash quality signal
-9.4%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
1.4%
ROA
Return on assets, trailing twelve months
1.0%
Cash & Equivalents
Liquid assets on the balance sheet
$561M
Net Cash
Cash exceeds total debt — no net leverage
$381M
Debt Serviceability
Net debt as a multiple of annual free cash flow
Net cash ✓
ROE
Return on equity, trailing twelve months
1.3%
Shareholder Returns
How capital is returned to owners
Total shareholder yield
0.0%
Dividend
—
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
—
Payout Ratio
Share of earnings distributed as dividends
—
Shares Outstanding
Current diluted share count
187M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt).
Open full ratios pageKTOS Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 29, 2026
High Risk
Valuation Risk
KTOS stock's valuation multiples, including forward EV/EBITDA and P/E ratios, are significantly higher than its peers. This elevated valuation suggests that the market has priced in substantial future growth, which poses a risk if such growth fails to materialize.
High Risk
Government Budget Dependence
Kratos is heavily reliant on government contracts and budgets, primarily in the defense and national security sectors. Any changes in government spending priorities or budget allocations could adversely affect the company's revenue and profitability.
Medium
Dilution Risk
The recent issuance of new shares by Kratos has the potential to dilute the ownership stake of existing shareholders. While this capital can support growth initiatives, it also presents a short-term risk to the stock price.
Medium
Execution Risk
Kratos is engaged in complex programs, and any execution delays or hiccups could hinder operational momentum and negatively impact financial performance. This risk is particularly pertinent given the intricate nature of their projects.
Medium
Cash Flow Concerns
The company has been experiencing persistent negative free cash flow margins alongside heavy capital expenditures. This situation highlights fragile cash generation capabilities and raises concerns about overall execution risk.
Lower
Insider Selling Trends
While some insider sales may be part of prearranged trading plans, a noticeable trend of insider selling can create a headwind for stock performance. This could signal a lack of confidence among insiders regarding the company's future prospects.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why KTOS Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 29, 2026
Unmanned Systems Growth
Kratos is a rare publicly traded company offering direct exposure to the tactical drone and UAV market, which is a high-priority niche for the Pentagon. The production and delivery of Valkyrie drones are driving significant growth in this segment.
Hypersonics and Advanced Technologies
Kratos is heavily invested in next-generation drone and space technologies, including hypersonics. Management expects significant growth in its hypersonics franchise, projecting to double revenues in 2026 and increase by over 75% in 2027.
Financial Performance and Outlook
The company has shown increasing revenue, with a 26% year-over-year rise in Q3 2025, and has achieved GAAP net profit. Long-term guidance forecasts 15-20% revenue growth for 2026 and 18-23% for 2027.
Strategic Positioning and Demand
Kratos is positioned at the intersection of autonomous drones, hypersonic systems, and space communications, areas receiving increasing government focus. The evolving global security environment is driving demand for advanced, affordable defense technologies like those Kratos offers.
Scalability and Efficiency
The company's business model, particularly in producing low-cost, consumable tactical systems like the Valkyrie drone, demonstrates manufacturing efficiency and scalability. This allows for potential margin expansion as production increases.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
KTOS Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$61.52
52W Range Position
28%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$32.85
+87.3% from the low
52-Week High
$134.00
-54.1% from the high
1 Month
-16.97%
3 Month
-34.84%
YTD
-22.4%
1 Year
+69.8%
3Y CAGR
+67.0%
5Y CAGR
+18.1%
10Y CAGR
+30.5%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
KTOS vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
79.3x
vs 39.1x median
+103% above peer median
Revenue Growth
+19.2%
vs +33.6% median
-43% below peer median
Net Margin
2.1%
vs -227.7% median
+101% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
KTO KTOS Kratos Defense & Security Solutions, Inc. | $11.5B | 79.3x | +19.2% | 2.1% | Buy | +79.7% |
AVA AVAV AeroVironment, Inc. | $8.7B | 60.6x | +17.5% | -13.9% | Buy | +97.1% |
RCA RCAT Red Cat Holdings, Inc. | $1.0B | — | +49.7% | -227.7% | Buy | +60.1% |
JOB JOBY Joby Aviation, Inc. | $10.3B | — | +50.1% | -1232.6% | Hold | +51.1% |
ACH ACHR Archer Aviation Inc. | $4.8B | — | — | -206066.7% | Buy | +92.4% |
CAC CACI CACI International Inc | $11.0B | 17.7x | +9.8% | 5.9% | Buy | +45.3% |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
FAQ
7 questionsKTOS Investor Questions
Common questions answered from live analyst data and company financials.
01Is Kratos Defense & Security Solutions, Inc. (KTOS) stock a buy or sell in 2026?
Kratos Defense & Security Solutions, Inc. (KTOS) is rated Buy by Wall Street analysts as of 2026. Of 22 analysts covering the stock, 19 rate it Buy or Strong Buy, 3 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $111, implying +79.7% from the current price of $62.
02What is the KTOS stock price target for 2026?
The Wall Street consensus price target for KTOS is $111 based on 22 analyst estimates. The high-end target is $135 (+119.4% from today), and the low-end target is $79 (+28.4%). The base case model target is $36.
03Is Kratos Defense & Security Solutions, Inc. (KTOS) stock overvalued in 2026?
KTOS trades at 79.3x times forward earnings. The stock trades at a notable premium to the broad market, which is typical for businesses with strong free cash flow and above-average growth expectations. Based on current multiples versus the peer group, the relative model signals significantly overvalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Kratos Defense & Security Solutions, Inc. (KTOS) stock in 2026?
The primary risks for KTOS in 2026 are: (1) Valuation Risk — KTOS stock's valuation multiples, including forward EV/EBITDA and P/E ratios, are significantly higher than its peers. (2) Government Budget Dependence — Kratos is heavily reliant on government contracts and budgets, primarily in the defense and national security sectors. (3) Dilution Risk — The recent issuance of new shares by Kratos has the potential to dilute the ownership stake of existing shareholders. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Kratos Defense & Security Solutions, Inc.'s revenue and earnings forecast?
Analyst consensus estimates KTOS will report consensus revenue of $1.6B (+19.2% year-over-year) and EPS of $0.40 (+213.4% year-over-year) for the upcoming fiscal year. The following year, analysts project $1.9B in revenue.
06When does Kratos Defense & Security Solutions, Inc. (KTOS) report its next earnings?
Kratos Defense & Security Solutions, Inc. is expected to report its next earnings on approximately 2026-05-06. Consensus expects EPS of $0.13 and revenue of $345M. Over recent quarters, KTOS has beaten EPS estimates 100% of the time.
07How much free cash flow does Kratos Defense & Security Solutions, Inc. generate?
Kratos Defense & Security Solutions, Inc. (KTOS) had a free cash outflow of $133M in free cash flow over the trailing twelve months — a free cash flow margin of 9.4%. KTOS returns capital to shareholders through and share repurchases ($0 TTM).