KTOS
Kratos Defense & Security Solutions, Inc.

Kratos Defense & Security Solutions, Inc.KTOS

Industrials · Aerospace & Defense
35.10USD
+5.12%
Nov 08, 2026
KTOS overview ready
Supplier of jet-powered tactical drones and counter-UAS systems to defense
Kratos is a direct defense supplier of jet-powered tactical and target drones, counter-UAS systems, related propulsion, electronics and mission hardware, alongside complementary hypersonic, missile-defense, satellite-ground and C5ISR offerings.
Primary theme is lagging
Defense / Drones is lagging (+0.2pp vs SPY over 21 sessions; 13 of 25 members ahead of SPY).
Price trend is broken
Longer-term context reads damaged structure, with a near-term setup of distribution pressure.
The tactical setup reads distribution pressure, but the weekly structure is broken.
Demanding valuation
The price embeds expectations that run ahead of the cash the business currently produces.
Low free cash flow yield
Free cash flow yield is weak.
Primary risk
Dependence on U.S. Government defense budgets and contract awards.
Market Nov 6Filing Sep 27Price action Nov 7Research Oct 16

Conviction Level

PriceAction3.4BusinessPerformance5.0BusinessQuality5.0Valuation3.1ThemeMomentum1.0Mixed — Revenue growth has accelerated across 4 consecutive quarters, rising from +22% to +36% year over year. Diluted EPS was $0.00 against $0.05 a year earlier. — From filed financial statements. Describes the recent trajectory of the business, not the stock. 20 of the 100 Conviction points.

Conviction uses Price Action, Business Performance, Business Quality, Valuation. Theme Momentum is research context, not an input.

Theme momentumPrimary theme · group context, not entry timing
vs SPY
+0.2pp
Theme return
−4.8%
Beating SPY
13 of 25
21 sessions to Nov 6, 2026 · Theme Leadership V2
Price
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Price Action

Price trend is broken
Longer-term context reads damaged structure, with a near-term setup of distribution pressure.
The tactical setup reads distribution pressure, but the weekly structure is broken.
EntryWeak / unconfirmed recovery

The daily chart may be improving, but the weekly fast averages have not been reclaimed — the recovery is not yet confirmed on the higher timeframe.

Key Financials

Market Cap
$6.6B
Avg Volume (60D)
4.6M
60 sessions
Revenue Growth YoY
+18.5%
FY2025 vs FY2024
Gross Margin
+23.0%
Trailing twelve months
Operating Margin
+0.4%
Trailing twelve months
Free Cash Flow Yield
-1.9%
Distance from 200DMA
-43.4%
P/E
300.4x
Market metrics as of Nov 6, 2026
Financial results for the period ended Sep 27, 2026
Filed balance-sheet data as of Sep 27, 2026

Business Performance

Mixed

Revenue growth has accelerated across 4 consecutive quarters, rising from +22% to +36% year over year. Diluted EPS was $0.00 against $0.05 a year earlier.

Latest reported: Q3 FY2026, ended Sep 27
Revenue growthAccelerating
+36%
$472M in Q3 FY2026 · YoY
YoY growth, last 4 quarters
  1. +22%
  2. +23%
  3. +31%
  4. +36%
Earnings growthDeclining
$0.00
Diluted EPS $0.00 vs $0.05 a year earlier · GAAP
Not enough comparable diluted EPS quarters for a YoY sequence.
Operating marginContracting
-1.0%
-3.1 pp YoY · gross margin 22.5% (+0.3 pp)
Profit is not fully converting to cash
The share count is rising

Business Quality

5.0 / 10

How well the business earns on its assets, converts earnings to cash and funds itself — read from its SEC filings.

Fundamentals & Valuation

Only one valuation perspective could be built for this company, and it reads expensive.
Kratos Defense & Security Solutions, Inc. has an Expensive valuation stance because the price embeds expectations that run ahead of the cash the business currently produces.

Company Research

Thesis
Kratos is a direct defense supplier of jet-powered tactical and target drones, counter-UAS systems, related propulsion, electronics and mission hardware, alongside complementary hypersonic, missile-defense, satellite-ground and C5ISR offerings.
Opportunity
High opportunity
Defense procurement for attritable unmanned systems and counter-UAS protection against proliferating drone threats.
Key risk
Dependence on U.S. Government defense budgets and contract awards.

Economic classification

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Business & Markets

Industrials · Aerospace & Defense
What they do

Kratos Defense & Security Solutions develops and supplies technology, hardware, and software primarily for defense and national security applications, operating through government solutions and unmanned systems segments.

How it earns

Revenue is generated primarily through government contracts and project-based sales of defense systems and related technologies.

Products & services
Jet-powered unmanned aerial drone systems
Counter-UAS systems
Virtualized ground systems for satellites and space vehicles
Hypersonic vehicles
Propulsion and mission hardware
Customers & end markets
U.S. Department of Defense and allied defense agencies
National security organizations
Commercial aerospace and defense markets internationally
Market position

Niche mid-cap defense supplier specializing in affordable unmanned systems and propulsion technologies.

Demand drivers
Medium cyclicality

Dependent on defense budget cycles and government contract awards, but supported by ongoing demand for unmanned and counter-drone systems.