Kratos Defense & Security Solutions, Inc. (KTOS) stock analysis
Close on Nov 12, 2026Market cap $6.52BP/E 289.6Yield –
StockData Score
Prices as of Nov 11, 2026How the score works
Mixed12 of 30 checks passed
Kratos Defense & Security Solutions passes 12 of the 30 checks behind our score; 8 could not be run for lack of data and count as not passed. Each dot in the shape is one check — hover it for the numbers.
- Valuation
- 0/6
- Growth
- 4/6
- Past performance
- 2/6
- Financial health
- 6/6
- Dividend
- 0/6
What stands out
No debt
Kratos Defense & Security Solutions has no borrowings on its latest balance sheet.
Revenue growing 10%+ a year
Revenue grew 14.5% a year over the last three fiscal years.
Earnings growth accelerating
Net income grew 10.0% over the last twelve months, against a 5-year average of -22.7% a year.
Interest well covered
No meaningful interest expense to cover.
What to watch
Margin of safety under 20%
The price is 39.3% above fair value, so there is no margin of safety.
Trading above fair value
The share price of $36.69 is above our fair value estimate of $26.33.
Return on capital under 10%
Return on invested capital was 0.2%, below the 10% that usually covers the cost of capital.
Earnings shrank over 5 years
Net income shrank 22.7% a year on average over the last five fiscal years.
Valuation0/6
P/E against its history
Not enough price and earnings history to compare.
P/E above the industry
Kratos Defense & Security Solutions's P/E of 305.8 is above the Transportation Equipment median of 20.3.
EV/EBITDA above its 5-year median
Kratos Defense & Security Solutions's EV/EBITDA of 65.8 is above its 5-year median of 53.3.
P/B above the industry
Kratos Defense & Security Solutions's price-to-book of 2.00 is above the Transportation Equipment median of 1.85.
Trading above fair value
The share price of $36.69 is above our fair value estimate of $26.33.
Margin of safety under 20%
The price is 39.3% above fair value, so there is no margin of safety.
Growth4/6
Revenue growing 10%+ a year
Revenue grew 14.5% a year over the last three fiscal years.
EPS growth over 3 years
Needs positive EPS three years ago and today.
Earnings growth accelerating
Net income grew 10.0% over the last twelve months, against a 5-year average of -22.7% a year.
Growing slower than the industry
Revenue grew 28.2% over the last twelve months; the Transportation Equipment median is 43.8%.
Guidance raised
Kratos Defense & Security Solutions raised its full year 2026 organic revenue growth outlook on Aug 4, 2026.
Gross margin improving
Gross margin was 23.0% over the last twelve months, against 22.9% a year earlier.
Past performance2/6
Return on equity
Needs positive equity and five years of results.
Return on capital under 10%
Return on invested capital was 0.2%, below the 10% that usually covers the cost of capital.
Return on equity below the industry
Kratos Defense & Security Solutions's return on equity of 0.8% is below the Transportation Equipment median of 2.7%.
Earnings shrank over 5 years
Net income shrank 22.7% a year on average over the last five fiscal years.
Net margin above its 5-year average
Net margin was 1.3% over the last twelve months, against a 5-year average of -0.4%.
Net margin above the industry
Kratos Defense & Security Solutions's net margin of 1.3% is above the Transportation Equipment median of -65.7%.
Financial health6/6
No debt
Kratos Defense & Security Solutions has no borrowings on its latest balance sheet.
Debt not rising
With no debt today, leverage cannot have risen.
Debt covered by cash flow
There is no debt to cover.
Interest well covered
No meaningful interest expense to cover.
Short-term assets cover short-term debts
Current assets are 5.42 times current liabilities.
Low bankruptcy risk
The Altman Z-score is 6.36; above 3 is the safe zone and below 1.8 the distress zone.
Dividend0/6
No dividend
Kratos Defense & Security Solutions has not paid a dividend in the last twelve months.
Yield against Treasuries
No dividend.
Yield against the market
No dividend.
Dividend stability
No dividend.
Earnings cover
No dividend.
Cash-flow cover
No dividend.
Fair value
How we estimate itOur estimate per share
$26.33
The share price is 39% above this estimate.
| Method | Multiple used | Own 5Y median | Industry median | Value per share | Weight |
|---|---|---|---|---|---|
| P/Eleft out, too far from the others | 20.3× | – | 20.3× | $2.44 | – |
| EV/EBITDA | 30.0× | 53.3× | 12.7× | $20.79 | 78% |
| P/B | 2.5× | 3.1× | 1.8× | $45.73 | 22% |
| Fair value | $26.33 | 100% | |||
Valuation over time
Using the earnings and balance sheet published at each date, not today's.
- P/E at month end
- Transportation Equipment median 20.3
An estimate from reported numbers and market multiples, not a price target or investment advice. It can be far off for companies whose profits are about to change sharply.
Market risk
From the past year of daily prices.
Liquidity
Low risk
- Average value traded per day
- $192.90M
- Value traded per 1% price move
- $77.08M
Downside
High risk
- Typical loss in a bad month
- 27.7%
- Volatility (annualized)
- 70%
- Sharpe ratio, 1 year
- -0.83
- Beta to the S&P 500 (5Y)
- 1.32
Typical bad-month loss, week by week
Margins
Share of revenue, fiscal years 2011 to 2025
Gross margin
Operating margin
Net margin
Growth rates
Compound annual growth to fiscal 2025
| Per year | 1 year | 3 years | 5 years | 10 years | Five-year pace |
|---|---|---|---|---|---|
| Revenue | +18.5% | +14.5% | +12.5% | +7.4% | |
| Gross profit | +7.2% | +10.9% | +8.7% | +6.6% | |
| Operating income | -11.7% | – | -2.7% | – | |
| Net income | +35.0% | – | -22.7% | +1.1% | |
| EPS, diluted | +18.2% | – | -28.0% | -9.2% |
Returns and balance sheet
10 fiscal years. Hover a measure to see how it is calculated.
| Measure | FY2016 | FY2020 | FY2025 | Trend |
|---|---|---|---|---|
| Return on equity | -22.8% | – | 1.3% | |
| Return on assets | -6.5% | 5.8% | 1.0% | |
| Current ratio | 1.90 | 3.87 | 4.06 | |
| Debt to equity | 1.56 | – | 0.00 | |
| Net debt to EBITDA | 80.29× | -1.49× | -7.71× | |
| Interest coverage | -0.5× | 1.2× | 2.7× | |
| Inventory turnover | 7.4× | – | – | |
| Capex to revenue | – | 4.8% | 7.1% | |
| Diluted shares | 61M | 119M | 165M |
Where the cash went
Fiscal 2021 to 2025, five years combined
Kratos Defense & Security Solutions generated $218.00M from operations and spent $297.80M on capital expenditure, dividends and share buybacks. 100% of that went back into the business.
DuPont analysis
Return on equity split into margin, efficiency and leverage
| Fiscal year | Net margin | Asset turnover | Equity multiplier | Return on equity |
|---|---|---|---|---|
| FY2025 | 1.6% | 0.61× | 1.32× | 1.3% |
| FY2024 | 1.4% | 0.63× | 1.54× | 1.4% |
| FY2017 | -7.1% | 0.61× | 2.50× | -10.8% |
| FY2016 | -11.2% | 0.59× | 3.49× | -22.8% |
Piotroski F-Score
Nine tests of profitability, balance sheet and efficiency, fiscal 2025 against fiscal 2024
- ProfitableNet income above zero$22.00M
- Cash generatingOperating cash flow above zero-$42.10M
- Return on assets improvedROA up on the prior year1.0% → 1.1%
- Earnings backed by cashOperating cash flow above net income-$42.10M vs $22.00M
- Less leverageLong-term debt to assets fell8.9% → 0.0%
- Better liquidityCurrent ratio rose2.94 → 4.06
- No dilutionShare count did not rise151M → 165M
- Gross margin improvedGross margin up on the prior year25.28% → 22.86%
- More efficientAsset turnover rose0.70 → 0.69
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