Upside case
Bull case
$24-55.8%
The bull case prices KTOS at 31x on FY1 earnings, assuming continued execution and no meaningful deceleration in the core business.
Analysis OverviewBuyUpdated Jun 18, 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
24
analysts
20 bullish · 0 bearish · 24 covering KTOS
Strong Buy
1
Buy
19
Hold
4
Sell
0
Strong Sell
0
Consensus Target
$110
+102.9% vs today
Scenario Range
$11 – $24
Model bear to bull value window
Coverage
24
Published analyst ratings
Valuation Context
70.9x
Forward P/E · Market cap $10.2B
KTOS price targets
Three scenarios for where KTOS stock could go
Current
~$54
Confidence
52 / 100
Updated
Jun 18, 2026
Where we are now
Current · $54
Bear
$11
Base
$18
Bull
$24
Market caseClosest to today
Base case
$18-66.5%
At 24x 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
$11-78.9%
If investor confidence fades or macro conditions deteriorate, a 56x multiple contraction could push KTOS down roughly 79% from where it trades now.
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
$10.2B
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
+45.9%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Last 4 Quarters
EPS beats: 4 of 4Q3 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
Q2 2026
EPS
$0.16/$0.13
Revenue
$371M/$345M
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| 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% |
| Q2 2026 | $0.16/$0.13 | +19.2% | $371M/$345M | +7.5% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$1.6B
+14.5% YoY
FY2
$1.9B
+19.9% YoY
EPS Outlook
FY1
$0.32
+97.4% YoY
FY2
$0.40
+24.8% YoY
Trailing FCF (TTM)-$134M
FCF Margin: -9.5%
Next Earnings
August 6, 2026
Expected EPS
$0.14
Expected Revenue
$411M
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
Expensive versus peers
Fair value est. $13 — implies -75.4% from today's price.
Premium to Fair Value
75.4%
above fair value
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
KTOS
417.0x
vs
S&P 500
24.4x
+1606% premium
vs Industrials Trailing P/E
KTOS
417.0x
vs
Industrials
25.6x
+1531% premium
vs KTOS 5Y Avg P/E
Today
417.0x
vs
5Y Average
—
Benchmark unavailable
Forward PE
70.9x
S&P 500
18.8x
+277%
Industrials
21.2x
+235%
5Y Avg
—
—
Trailing PE
417.0x
S&P 500
24.4x
+1606%
Industrials
25.6x
+1531%
5Y Avg
—
—
PEG Ratio
—
S&P 500
1.66x
—
Industrials
1.65x
—
5Y Avg
—
—
EV/EBITDA
112.5x
S&P 500
15.2x
+639%
Industrials
13.9x
+710%
5Y Avg
41.7x
+170%
Price/FCF
—
S&P 500
20.7x
—
Industrials
20.0x
—
5Y Avg
—
—
Price/Sales
7.5x
S&P 500
3.1x
+144%
Industrials
1.6x
+383%
5Y Avg
4.1x
+83%
Dividend Yield
—
S&P 500
1.91%
—
Industrials
1.21%
—
5Y Avg
—
—
| Metric | KTOS | S&P 500 | Industrials | 5Y Avg KTOS |
|---|---|---|---|---|
| Forward PE | 70.9x | 18.8x+277% | 21.2x+235% | — |
| Trailing PE | 417.0x | 24.4x+1606% | 25.6x+1531% | — |
| PEG Ratio | — | 1.66x | 1.65x | — |
| EV/EBITDA | 112.5x | 15.2x+639% | 13.9x+710% | 41.7x+170% |
| Price/FCF | — | 20.7x | 20.0x | — |
| Price/Sales | 7.5x | 3.1x+144% | 1.6x+383% | 4.1x+83% |
| Dividend Yield | — | 1.91% | 1.21% | — |
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
-$134M
FCF Margin
FCF as share of revenue — the primary cash quality signal
-9.5%
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
188M
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 June 18, 2026
High Risk
Insider and institutional selling
Kratos Defense insiders and institutions are selling stock in 2026, creating a headwind for investors and raising the risk of a deeper correction.
Medium
Potential dilution risk
The threat of dilution is a key risk that could keep volatility high for Kratos Defense in the coming months.
Medium
2026 headwinds
Headwinds in 2026 are expected to impact Kratos Defense's stock performance, despite its solid positioning in national defense and security.
Lower
Valuation uncertainty
A DCF model suggests a wide intrinsic value range for Kratos Defense, indicating potential valuation risks depending on market conditions.
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 June 18, 2026
Bullish analyst coverage
Multiple bullish theses on Kratos Defense & Security Solutions, Inc. have been published on Substack platforms like Stock Analysis Compilation and MTC.
Defense technology leadership
Kratos specializes in advanced defense technologies including unmanned aircraft, propulsion systems, microwave electronics, and satellite ground systems for U.S. and allied forces.
Attractive valuation upside
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.
High-growth market positioning
The company operates in high-growth defense segments with trailing and forward P/E ratios of 669.62 and 181.82 respectively, indicating strong future earnings expectations.
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
$54.21
52W Range Position
16%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$39.00
+39.0% from the low
52-Week High
$134.00
-59.5% from the high
1 Month
-0.02%
3 Month
-41.73%
YTD
-31.6%
1 Year
+28.6%
3Y CAGR
+58.0%
5Y CAGR
+15.5%
10Y CAGR
+29.6%
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
70.9x
vs 58.9x median
+20% above peer median
Revenue Growth
+14.5%
vs +10.0% median
+45% above peer median
Net Margin
2.1%
vs -189.2% median
+101% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
KTO KTOS Kratos Defense & Security Solutions, Inc. | $10.2B | 70.9x | +14.5% | 2.1% | Buy | +102.9% |
AVA AVAV AeroVironment, Inc. | $8.5B | 58.9x | +13.0% | -13.9% | Buy | +72.3% |
RCA RCAT Red Cat Holdings, Inc. | $1.2B | 104.0x | +9.0% | -189.2% | Buy | +95.2% |
JOB JOBY Joby Aviation, Inc. | $9.8B | — | +15.9% | -1232.6% | Hold | +65.0% |
ACH ACHR Archer Aviation Inc. | $4.2B | — | +10.0% | -39078.9% | Buy | +115.4% |
CAC CACI CACI International Inc | $10.3B | 16.5x | +7.5% | 5.9% | Buy | +48.0% |
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 24 analysts covering the stock, 20 rate it Buy or Strong Buy, 4 rate it Hold, and 0 rate it Sell or Strong Sell. The consensus 12-month price target is $110, implying +102.9% from the current price of $54. The bear case scenario is $11 and the bull case is $24.
02What is the KTOS stock price target for 2026?
The Wall Street consensus price target for KTOS is $110 based on 24 analyst estimates. The high-end target is $135 (+149.0% from today), and the low-end target is $80 (+47.6%). The base case model target is $18.
03Is Kratos Defense & Security Solutions, Inc. (KTOS) stock overvalued in 2026?
KTOS trades at 70.9x 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 expensive versus peers. 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) Insider and institutional selling — Kratos Defense insiders and institutions are selling stock in 2026, creating a headwind for investors and raising the risk of a deeper correction. (2) Potential dilution risk — The threat of dilution is a key risk that could keep volatility high for Kratos Defense in the coming months. (3) 2026 headwinds — Headwinds in 2026 are expected to impact Kratos Defense's stock performance, despite its solid positioning in national defense and security. 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 (+14.5% year-over-year) and EPS of $0.32 (+97.4% 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 2026-08-06. Consensus expects EPS of $0.14 and revenue of $411M. 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 $134M in free cash flow over the trailing twelve months — a free cash flow margin of 9.5%. KTOS returns capital to shareholders through and share repurchases ($0 TTM).