Kratos Defense & Security Solutions (NASDAQ:KTOS – Get Free Report) issued its quarterly earnings results on Tuesday. The aerospace company reported $0.21 EPS for the quarter, beating analysts’ consensus estimates of $0.14 by $0.07, FiscalAI reports. The company had revenue of $458.80 million for the quarter, compared to analyst estimates of $410.38 million. Kratos Defense & Security Solutions had a return on equity of 2.82% and a net margin of 2.08%.The company’s quarterly revenue was up 30.5% compared to the same quarter last year. During the same period last year, the company earned $0.11 earnings per share.
Here are the key takeaways from Kratos Defense & Security Solutions’ conference call:
- Positive Sentiment: Kratos reported Q2 revenue of $458.8 million, up 19.1% organically year over year, while adjusted EBITDA of $38.2 million exceeded guidance. Management raised its full-year 2026 organic revenue growth outlook to 19%-23% and expects further growth and margin expansion in the second half and into 2027.
- Positive Sentiment: Hypersonics is expected to remain a major growth driver, with revenue projected to rise from approximately $200 million in 2025 to $400 million in 2026 and at least $700 million in 2027. The company cited new awards, approximately $400 million in recent hypersonic and related funding, and an operational Indiana integration facility supporting higher production rates.
- Positive Sentiment: Kratos is preparing for substantial engine demand tied to low-cost cruise missiles and future JASSM/LRASM production. It has begun ordering components for 3,000 Spartan turbojet engines targeted for 2027 and plans to support an additional 5,000 in 2028, while its GE turbofan partnership is expected to enter production beginning in 2028.
- Positive Sentiment: The company highlighted expanding opportunities across space, counter-UAS, directed energy, and unmanned systems, including a $160 million initial directed-energy award, a $100 million space-domain-awareness production award, and expected additional Valkyrie and Marine Corps orders. Management also cited potential international demand, including Taiwan-related Tactical Firejet and Valkyrie opportunities.
- Negative Sentiment: Cash flow was pressured by rapid growth and investment, with Q2 operating cash flow of negative $11 million and free cash flow of negative $18.9 million. Total 2026 investment is expected to remain elevated at approximately $250 million-$270 million, while the stronger Israeli shekel is forecast to reduce full-year EBITDA by roughly $5 million-$7 million.
Kratos Defense & Security Solutions Trading Up 5.4%
Shares of NASDAQ KTOS traded up $2.66 during mid-day trading on Tuesday, hitting $51.87. 6,320,061 shares of the company traded hands, compared to its average volume of 4,464,881. The company has a quick ratio of 5.08, a current ratio of 5.63 and a debt-to-equity ratio of 0.04. Kratos Defense & Security Solutions has a 1 year low of $43.09 and a 1 year high of $134.00. The stock has a market capitalization of $9.73 billion, a price-to-earnings ratio of 305.12 and a beta of 1.08. The business has a 50 day moving average of $52.63 and a two-hundred day moving average of $72.13.
Wall Street Analyst Weigh In
View Our Latest Stock Analysis on KTOS
Insider Transactions at Kratos Defense & Security Solutions
In other Kratos Defense & Security Solutions news, insider Phillip D. Carrai sold 6,500 shares of the firm’s stock in a transaction dated Friday, May 15th. The shares were sold at an average price of $52.13, for a total value of $338,845.00. Following the completion of the transaction, the insider directly owned 221,550 shares in the company, valued at $11,549,401.50. This trade represents a 2.85% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Stacey G. Rock sold 4,675 shares of the firm’s stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $50.00, for a total transaction of $233,750.00. Following the completion of the transaction, the insider owned 9,600 shares of the company’s stock, valued at approximately $480,000. The trade was a 32.75% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 139,036 shares of company stock worth $7,799,667 in the last three months. Insiders own 1.50% of the company’s stock.
Institutional Investors Weigh In On Kratos Defense & Security Solutions
A number of large investors have recently made changes to their positions in KTOS. Morgan Stanley boosted its stake in Kratos Defense & Security Solutions by 3.9% in the 4th quarter. Morgan Stanley now owns 3,311,095 shares of the aerospace company’s stock worth $251,345,000 after purchasing an additional 124,607 shares during the period. Invesco Ltd. raised its stake in Kratos Defense & Security Solutions by 7.4% during the 3rd quarter. Invesco Ltd. now owns 3,046,194 shares of the aerospace company’s stock valued at $278,331,000 after purchasing an additional 209,189 shares during the period. Northern Trust Corp lifted its holdings in shares of Kratos Defense & Security Solutions by 13.6% in the third quarter. Northern Trust Corp now owns 2,072,700 shares of the aerospace company’s stock valued at $189,383,000 after purchasing an additional 247,652 shares in the last quarter. Corient Private Wealth LLC lifted its holdings in shares of Kratos Defense & Security Solutions by 7,701.6% in the fourth quarter. Corient Private Wealth LLC now owns 1,593,549 shares of the aerospace company’s stock valued at $120,966,000 after purchasing an additional 1,573,123 shares in the last quarter. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its position in shares of Kratos Defense & Security Solutions by 59.1% in the second quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 1,094,884 shares of the aerospace company’s stock worth $50,857,000 after buying an additional 406,895 shares during the period. Institutional investors and hedge funds own 75.92% of the company’s stock.
Key Kratos Defense & Security Solutions News
Here are the key news stories impacting Kratos Defense & Security Solutions this week:
- Positive Sentiment: Kratos beat quarterly estimates. Second-quarter earnings were $0.21 per share, above the $0.14 consensus estimate, while revenue of $458.8 million exceeded expectations of $410.4 million. Kratos Second-Quarter Earnings Press Release
- Positive Sentiment: Revenue growth remained strong. Second-quarter revenue increased 30.5% year over year to $458.8 million, including 19.1% organic growth, reinforcing investor expectations for continued demand across Kratos’ aerospace, defense and drone-related businesses. Kratos Reports Second-Quarter 2026 Financial Results
- Positive Sentiment: Full-year revenue guidance was above consensus. Kratos projected fiscal 2026 revenue of approximately $1.8 billion, compared with analyst expectations of about $1.7 billion. Third-quarter revenue guidance of $460 million to $480 million also implies a midpoint modestly above the $462.8 million consensus estimate.
- Positive Sentiment: Analyst sentiment remains bullish. Cantor Fitzgerald maintained an “overweight” rating and indicated substantial potential upside despite lowering its price target from $115 to $100. Cantor Fitzgerald Kratos Price Target Update
- Negative Sentiment: The price-target reduction is a modest caution. Although Cantor remains positive on KTOS, lowering its target suggests analysts see some near-term valuation or execution risks after the stock’s earlier rally.
About Kratos Defense & Security Solutions
Kratos Defense & Security Solutions, Inc (NASDAQ: KTOS) is a technology-driven company that specializes in national security and defense solutions for government and military customers. The firm’s core capabilities span unmanned systems, satellite communications, missile defense, cyber security, and directed-energy weapons. Through its integrated approach, Kratos delivers mission-critical products and services designed to enhance operational readiness and support force modernization initiatives.
In the unmanned systems arena, Kratos develops high-performance aerial platforms used as target drones, low-cost attritable aircraft and experimental stealth demonstrators.
Featured Stories
- Five stocks we like better than Kratos Defense & Security Solutions
- System Upgrade: First Internet Bancorp Options Surge
- AI Security Breaches Raise New Risks for Microsoft and Amazon’s Agent Push
- The AI Chip Blockade Is Creating a Shadow Market
- Grab Holdings Stock Forms Bottom After Strong Beat-and-Raise Quarter
Receive News & Ratings for Kratos Defense & Security Solutions Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Kratos Defense & Security Solutions and related companies with MarketBeat.com's FREE daily email newsletter.
