Kratos Defense & Security Solutions (NASDAQ:KTOS) Reaches New 1-Year Low – Should You Sell?

by · The Markets Daily

Shares of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS – Get Free Report) hit a new 52-week low on Wednesday. The company traded as low as $36.03 and last traded at $36.2920, with a volume of 2,641,200 shares changing hands. The stock had previously closed at $40.99.

Kratos Defense & Security Solutions News Summary

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

  • Positive Sentiment: Third-quarter adjusted earnings were $0.24 per share, topping the $0.21 consensus and rising from $0.14 a year earlier. Revenue grew 35.7% to $471.8 million, approximately in line with estimates. Kratos Defense Q3 Earnings Outpace Estimates, Revenues Increase Y/Y
  • Positive Sentiment: Demand indicators were strong: the company reported a 2.2-to-1 book-to-bill ratio, $1.037 billion in bookings, and a record $2.65 billion backlog—supporting future revenue visibility. Kratos Reports Third Quarter 2026 Financial Results
  • Positive Sentiment: Management raised its 2026 outlook, and fourth-quarter revenue guidance extends the growth story, with the top of the $480 million–$510 million range above analyst expectations.
  • Neutral Sentiment: Options trading was unusually active, with call volume 44% above its average. This may reflect increased investor interest but does not establish the direction of future trading.
  • Negative Sentiment: Despite higher adjusted EBITDA, Kratos reported negative free cash flow and a GAAP operating loss, raising questions about how quickly growth converts into cash and sustained profitability. Kratos Sales Up 36%, Free Cash Flow Negative
  • Negative Sentiment: BTIG cut its price target to $65 from $104, though it maintained a Buy rating. The reduction signals a more cautious valuation view even as the analyst remains positive. BTIG Research ratings

Wall Street Analyst Weigh In

KTOS has been the subject of several recent research reports. BNP Paribas Exane raised shares of Kratos Defense & Security Solutions from a “neutral” rating to an “outperform” rating in a research report on Thursday, October 8th. B. Riley Financial reduced their target price on shares of Kratos Defense & Security Solutions from $128.00 to $91.00 and set a “buy” rating on the stock in a report on Friday, October 30th. Royal Bank Of Canada reduced their target price on shares of Kratos Defense & Security Solutions from $80.00 to $55.00 and set an “outperform” rating on the stock in a report on Wednesday, October 28th. Citizens Jmp decreased their price target on shares of Kratos Defense & Security Solutions from $105.00 to $70.00 and set a “market outperform” rating for the company in a research report on Monday, October 19th. Finally, Piper Sandler lowered their price target on Kratos Defense & Security Solutions from $75.00 to $61.00 and set an “overweight” rating for the company in a report on Friday, October 23rd. Three equities research analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, one has given a Hold rating and two have given a Sell rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and an average target price of $81.70.

Check Out Our Latest Research Report on Kratos Defense & Security Solutions

Kratos Defense & Security Solutions Stock Up 5.1%

The firm has a 50-day moving average of $43.85 and a 200 day moving average of $63.03. The stock has a market capitalization of $6.59 billion, a price-to-earnings ratio of 206.47 and a beta of 1.18. The company has a current ratio of 5.54, a quick ratio of 4.99 and a debt-to-equity ratio of 0.04.

Kratos Defense & Security Solutions (NASDAQ:KTOS – Get Free Report) last issued its quarterly earnings data on Thursday, November 5th. The aerospace company reported $0.24 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.21 by $0.03. The company had revenue of $471.80 million during the quarter, compared to the consensus estimate of $471.40 million. Kratos Defense & Security Solutions had a net margin of 2.03% and a return on equity of 3.07%. Kratos Defense & Security Solutions’s revenue for the quarter was up 35.7% on a year-over-year basis. During the same quarter last year, the company earned $0.14 earnings per share. On average, sell-side analysts anticipate that Kratos Defense & Security Solutions, Inc. will post 0.59 earnings per share for the current year.

Insiders Place Their Bets

In related news, Director Scot Jarvis sold 10,000 shares of the firm’s stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $63.50, for a total transaction of $635,000.00. Following the completion of the sale, the director directly owned 65,123 shares of the company’s stock, valued at approximately $4,135,310.50. This trade represents a 13.31% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Phillip D. Carrai sold 26,500 shares of the firm’s stock in a transaction on Monday, August 17th. The shares were sold at an average price of $63.25, for a total transaction of $1,676,125.00. Following the sale, the insider directly owned 182,084 shares of the company’s stock, valued at approximately $11,516,813. The trade was a 12.70% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last ninety days, insiders sold 373,013 shares of company stock valued at $23,340,582. Corporate insiders own 1.50% of the company’s stock.

Institutional Trading of Kratos Defense & Security Solutions

Several large investors have recently modified their holdings of KTOS. B&D White Capital Company LLC boosted its stake in Kratos Defense & Security Solutions by 21,357.3% in the 3rd quarter. B&D White Capital Company LLC now owns 1,823,870 shares of the aerospace company’s stock worth $77,861,000 after purchasing an additional 1,815,370 shares during the period. Bank of New York Mellon Corp acquired a new stake in Kratos Defense & Security Solutions during the 2nd quarter valued at $65,293,000. Bamco Inc. NY acquired a new stake in Kratos Defense & Security Solutions during the 2nd quarter valued at $53,746,000. American Capital Management Inc. acquired a new stake in Kratos Defense & Security Solutions during the 2nd quarter valued at $51,338,000. Finally, Paradigm Capital Management Inc. NY purchased a new stake in shares of Kratos Defense & Security Solutions in the second quarter valued at $34,842,000. 75.92% of the stock is currently owned by institutional investors and hedge funds.

About Kratos Defense & Security Solutions

(Get Free Report)

Kratos Defense & Security Solutions, Inc is a technology and defense contractor that develops systems and products for national security applications. The company supports the U.S. Department of Defense, intelligence agencies, national security-related organizations and selected commercial customers, with an emphasis on affordable, rapidly deployable technologies.

Its offerings include unmanned aerial and target systems, hypersonic and high-speed systems, rocket and propulsion technologies, satellite communications equipment, microwave electronics, radar and missile-defense systems, electronic warfare solutions, command-and-control systems, and virtual and live training products.

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