Kratos Defense & Security Solutions (NASDAQ:KTOS) Raised to Buy at Jefferies Financial Group

Key Points

• Jefferies upgraded Kratos to a Buy with an $85 price target (about 26% upside) and joins other firms lifting targets; MarketBeat's consensus remains a Moderate Buy with an average target of $98.28.
• Kratos beat quarterly expectations — $0.18 EPS vs. $0.14 expected and $345.1M revenue vs. $327.5M expected — with revenue up 21.9% year‑over‑year.
• There has been notable insider selling (including the CEO and a director) totaling ~402,699 shares in the last 90 days, even as hedge funds and institutional investors own about 75.9% of the stock.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) was upgraded by equities researchers at Jefferies Financial Group from a "hold" rating to a "buy" rating in a research note issued on Monday,Finviz reports. The brokerage currently has a $85.00 price objective on the aerospace company's stock. Jefferies Financial Group's price target points to a potential upside of 26.28% from the stock's previous close.

KTOS has been the topic of several other research reports. BTIG Research increased their target price on shares of Kratos Defense & Security Solutions from $95.00 to $115.00 and gave the company a "buy" rating in a report on Tuesday, February 24th. KeyCorp lifted their price objective on Kratos Defense & Security Solutions from $90.00 to $130.00 and gave the stock an "overweight" rating in a report on Wednesday, January 28th. The Goldman Sachs Group increased their target price on Kratos Defense & Security Solutions from $93.00 to $125.00 and gave the company a "buy" rating in a report on Tuesday, January 20th. Weiss Ratings restated a "hold (c)" rating on shares of Kratos Defense & Security Solutions in a research report on Thursday, January 22nd. Finally, Noble Financial reaffirmed an "outperform" rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, January 20th. One analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and five have issued a Hold rating to the stock. Based on data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $98.28.

Kratos Defense & Security Solutions Stock Performance

NASDAQ:KTOS opened at $67.31 on Monday. The company has a market capitalization of $12.61 billion, a price-to-earnings ratio of 517.81 and a beta of 1.22. The business has a 50 day moving average of $89.65 and a 200 day moving average of $88.02. The company has a debt-to-equity ratio of 0.05, a current ratio of 4.06 and a quick ratio of 3.46. Kratos Defense & Security Solutions has a 1-year low of $25.78 and a 1-year high of $134.00.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its quarterly earnings results on Monday, February 23rd. The aerospace company reported $0.18 EPS for the quarter, beating analysts' consensus estimates of $0.14 by $0.04. The business had revenue of $345.10 million for the quarter, compared to analysts' expectations of $327.51 million. Kratos Defense & Security Solutions had a net margin of 1.63% and a return on equity of 3.34%. The business's quarterly revenue was up 21.9% on a year-over-year basis. During the same period last year, the business earned $0.13 earnings per share. On average, sell-side analysts predict that Kratos Defense & Security Solutions will post 0.31 earnings per share for the current fiscal year.

Insider Activity at Kratos Defense & Security Solutions

In other news, Director William A. Hoglund sold 30,500 shares of Kratos Defense & Security Solutions stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $71.19, for a total value of $2,171,295.00. Following the sale, the director directly owned 252,500 shares in the company, valued at approximately $17,975,475. This trade represents a 10.78% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Eric M. Demarco sold 191,699 shares of the business's stock in a transaction that occurred on Tuesday, January 6th. The shares were sold at an average price of $90.28, for a total value of $17,306,585.72. Following the transaction, the chief executive officer directly owned 687,117 shares in the company, valued at $62,032,922.76. This trade represents a 21.81% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 402,699 shares of company stock worth $36,696,613 over the last 90 days. 2.37% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds have recently added to or reduced their stakes in KTOS. Geode Capital Management LLC boosted its position in shares of Kratos Defense & Security Solutions by 3.5% during the fourth quarter. Geode Capital Management LLC now owns 4,446,230 shares of the aerospace company's stock valued at $337,565,000 after purchasing an additional 148,622 shares in the last quarter. Morgan Stanley grew its stake in shares of 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 buying an additional 124,607 shares during the last quarter. First Trust Advisors LP grew its stake in shares of Kratos Defense & Security Solutions by 29.5% in the 3rd quarter. First Trust Advisors LP now owns 3,068,863 shares of the aerospace company's stock worth $280,402,000 after buying an additional 698,778 shares during the last quarter. Invesco Ltd. boosted its holdings in Kratos Defense & Security Solutions by 7.4% in the third quarter. Invesco Ltd. now owns 3,046,194 shares of the aerospace company's stock worth $278,331,000 after acquiring an additional 209,189 shares in the last quarter. Finally, Hood River Capital Management LLC boosted its stake in Kratos Defense & Security Solutions by 13.3% in the 2nd quarter. Hood River Capital Management LLC now owns 2,755,446 shares of the aerospace company's stock worth $127,990,000 after purchasing an additional 324,140 shares in the last quarter. 75.92% of the stock is owned by hedge funds and other institutional investors.

Kratos Defense & Security Solutions Company Profile

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.

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