MODEL VERDICT
Kratos Defense & Security Solutions, Inc. (KTOS)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.13 | $62.05 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.13 | $61.26 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.13 | $70.99 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.13 | $74.66 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.13 | $70.34 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 10 analyst estimates | $18.38 | -70.4% | 20% | A- | Analyst Est. |
| EV/EBITDA 10 industry peers | $9.32 | -85.0% | 20% | A- | Peer Data |
| Industry Median P/E 10 industry peers | $3.73 | -94.0% | 15% | A | Peer Data |
| EV/EBIT 9 industry peers | $6.55 | -89.4% | 8% | B+ | Peer Data |
| EV To Revenue 10 industry peers | $19.81 | -68.1% | 4% | B | Data |
| Price / Sales 10 industry peers | $15.53 | -75.0% | 3% | B | Model Driven |
| Earnings Yield 10 industry peers | $3.60 | -94.2% | 2% | B | Data |
| Weighted Output Blended model output | $15.07 | -75.7% | 100% | 53 | SIGNIFICANTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 401× | 439× | 477× (Current) | 515× | 553× |
|---|---|---|---|---|---|
| Bear Case (2%) | $53 | $58 | $63 | $68 | $73 |
| Conservative (5%) | $55 | $60 | $65 | $70 | $75 |
| Base Case (-28.0%) | $38 | $41 | $45 | $48 | $52 |
| Bull Case (-38%) | $32 | $36 | $39 | $42 | $45 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 257.10 | 201.77 | 40.94 | 583.92 | 232.78 |
| EV/EBIT | 119.63 | 91.29 | 54.51 | 286.63 | 83.60 |
| EV/EBITDA | 56.19 | 40.21 | 29.23 | 146.61 | 40.51 |
| P/FCF | 347.51 | 304.29 | 206.70 | 531.54 | 166.67 |
| P/FFO | 109.52 | 73.91 | 28.66 | 326.88 | 105.01 |
| P/TBV | 8.71 | 7.21 | 3.91 | 20.92 | 5.70 |
| P/AFFO | 177.44 | 92.33 | 41.90 | 398.07 | 192.73 |
| P/B Ratio | 3.28 | 2.94 | 1.38 | 6.58 | 1.61 |
| P/S Ratio | 3.92 | 3.06 | 1.46 | 9.75 | 2.72 |
Based on our peer multiples analysis with 19 valuation metrics, the model estimates KTOS's fair value at $15.07 vs the current price of $62.05, implying -75.7% downside potential. Model verdict: Significantly Overvalued. Confidence: 53/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $15.07 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $12.80 (P10) to $21.66 (P90), with a median of $17.05.
KTOS's current P/E of 477.3x compares to the industry median of 28.7x (10 peers in the group). This represents a +1564.6% premium to the industry. The historical average P/E is 257.1x over 4 years. Signal: High Premium.
22 analysts cover KTOS with a consensus rating of Buy. The consensus price target is $110.58 (range: $79.00 — $135.00), implying +78.2% upside from the current price. Grade breakdown: Strong Buy (1), Buy (18), Hold (3), Sell (0), Strong Sell (0).
The model confidence score is 53/100, based on: data completeness (12), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: --10 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Multiple compression: KTOS trades at the N/Ath percentile of its historical P/E range. A reversion to median (257.1×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that KTOS's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.5σ, meaning margins are 0.5 standard deviations below their historical average. If margins revert to the 4-year mean (3.1%), the model estimates fair value drops by 120.0% to approximately $63. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.