Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Down 4.8% - Here's Why

Key Points

• Shares fell 4.8% to about $103 on Friday with 3.64 million shares traded (an 18% drop from average), after closing at $108.16 the prior session.
• Analyst sentiment is broadly positive with an average rating of "Moderate Buy" (1 Strong Buy, 16 Buy, 5 Hold), but the consensus price target of $95.28 is below the current price even as some firms raised targets to $130–$135.
• Insiders have been net sellers—CEO Eric Demarco sold 200,000 shares and insiders disposed of 911,815 shares (~$74.3M) in the last 90 days—while the company shows strong liquidity and 26% year-over-year revenue growth but an extremely high PE of 792.45.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price fell 4.8% on Friday . The company traded as low as $101.63 and last traded at $103.01. 3,641,869 shares traded hands during trading, a decline of 18% from the average session volume of 4,419,868 shares. The stock had previously closed at $108.16.

Analyst Upgrades and Downgrades

A number of research analysts have recently weighed in on the company. Weiss Ratings restated a "hold (c)" rating on shares of Kratos Defense & Security Solutions in a research report on Thursday, January 22nd. KeyCorp raised their target price on shares of Kratos Defense & Security Solutions from $90.00 to $130.00 and gave the company an "overweight" rating in a report on Wednesday. Piper Sandler assumed coverage on shares of Kratos Defense & Security Solutions in a research note on Wednesday, January 21st. They set a "neutral" rating and a $99.00 price target on the stock. Truist Financial set a $135.00 price objective on shares of Kratos Defense & Security Solutions in a research note on Friday, January 9th. Finally, Citigroup restated a "market outperform" rating on shares of Kratos Defense & Security Solutions in a research report on Monday, January 12th. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating and five have assigned a Hold rating to the company. According to data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average price target of $95.28.

Kratos Defense & Security Solutions Price Performance

The company has a current ratio of 4.30, a quick ratio of 3.68 and a debt-to-equity ratio of 0.04. The company has a market capitalization of $17.39 billion, a PE ratio of 792.45 and a beta of 1.09. The stock's 50-day moving average is $90.23 and its two-hundred day moving average is $79.93.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last released its earnings results on Tuesday, November 4th. The aerospace company reported $0.14 EPS for the quarter, beating analysts' consensus estimates of $0.12 by $0.02. Kratos Defense & Security Solutions had a return on equity of 3.14% and a net margin of 1.56%.The firm had revenue of $347.60 million for the quarter, compared to analysts' expectations of $323.01 million. During the same quarter in the prior year, the firm posted $0.11 earnings per share. The company's quarterly revenue was up 26.0% on a year-over-year basis. On average, equities analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.31 EPS for the current year.

Insider Buying and Selling

In other Kratos Defense & Security Solutions news, CEO Eric M. Demarco sold 200,000 shares of the business's stock in a transaction dated Monday, December 1st. The shares were sold at an average price of $74.09, for a total value of $14,818,000.00. Following the completion of the sale, the chief executive officer directly owned 1,196,237 shares of the company's stock, valued at $88,629,199.33. The trade was a 14.32% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, insider Jonah Adelman sold 30,000 shares of the firm's stock in a transaction that occurred on Tuesday, November 25th. The stock was sold at an average price of $74.80, for a total transaction of $2,244,000.00. Following the transaction, the insider directly owned 9,348 shares in the company, valued at approximately $699,230.40. This trade represents a 76.24% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 911,815 shares of company stock worth $74,343,531 over the last ninety days. 2.37% of the stock is owned by insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Hedge funds and other institutional investors have recently made changes to their positions in the company. Greenleaf Trust raised its stake in Kratos Defense & Security Solutions by 2.7% during the fourth quarter. Greenleaf Trust now owns 3,830 shares of the aerospace company's stock worth $291,000 after purchasing an additional 100 shares during the period. LVW Advisors LLC increased its holdings in shares of Kratos Defense & Security Solutions by 3.0% during the 4th quarter. LVW Advisors LLC now owns 3,665 shares of the aerospace company's stock worth $278,000 after buying an additional 107 shares during the last quarter. Dupree Financial Group LLC raised its position in shares of Kratos Defense & Security Solutions by 0.7% during the 4th quarter. Dupree Financial Group LLC now owns 23,817 shares of the aerospace company's stock valued at $1,808,000 after buying an additional 165 shares during the period. CWM LLC raised its position in shares of Kratos Defense & Security Solutions by 3.8% during the 2nd quarter. CWM LLC now owns 4,722 shares of the aerospace company's stock valued at $219,000 after buying an additional 171 shares during the period. Finally, M&T Bank Corp lifted its holdings in Kratos Defense & Security Solutions by 7.3% in the fourth quarter. M&T Bank Corp now owns 2,711 shares of the aerospace company's stock valued at $205,000 after acquiring an additional 185 shares during the last quarter. Institutional investors own 75.92% of the company's stock.

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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