Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Down 5.5% - Should You Sell?

Key Points

• KTOS shares fell 5.5% on Thursday, trading as low as $46.31 after closing at $49.68, with volume below the recent average.
• Wall Street sentiment remains constructive: the stock has a consensus rating of “Moderate Buy” and an average price target of $101.29, even though some firms have more cautious targets around the low $80s.
• Recent fundamentals were solid, with the company beating quarterly earnings and revenue estimates; EPS came in at $0.16 versus $0.13 expected, and revenue rose 22.6% year over year to $371 million.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price was down 5.5% on Thursday . The stock traded as low as $46.31 and last traded at $46.96. 3,103,802 shares traded hands during trading, a decline of 32% from the average daily volume of 4,556,349 shares. The stock had previously closed at $49.68.

Analyst Upgrades and Downgrades

Several research firms have recently commented on KTOS. Jefferies Financial Group reissued a "buy" rating and issued a $80.00 price objective on shares of Kratos Defense & Security Solutions in a report on Wednesday, July 8th. Canaccord Genuity Group upped their price target on shares of Kratos Defense & Security Solutions from $125.00 to $130.00 and gave the stock a "buy" rating in a research report on Thursday, May 7th. Wedbush assumed coverage on shares of Kratos Defense & Security Solutions in a research note on Tuesday, June 30th. They issued an "outperform" rating and a $85.00 price target for the company. Truist Financial raised shares of Kratos Defense & Security Solutions to a "strong-buy" rating in a research report on Friday, May 1st. Finally, UBS Group reaffirmed a "neutral" rating and issued a $82.00 target price on shares of Kratos Defense & Security Solutions in a report on Thursday, May 7th. Three equities research analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and four have given a Hold rating to the company's stock. According to MarketBeat.com, the company presently has a consensus rating of "Moderate Buy" and an average price target of $101.29.

Kratos Defense & Security Solutions Price Performance

The company has a debt-to-equity ratio of 0.04, a quick ratio of 5.08 and a current ratio of 5.63. The firm has a market capitalization of $8.81 billion, a price-to-earnings ratio of 276.24 and a beta of 1.07. The business has a fifty day moving average of $54.70 and a two-hundred day moving average of $76.18.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last posted its quarterly earnings results on Wednesday, May 6th. The aerospace company reported $0.16 earnings per share for the quarter, beating analysts' consensus estimates of $0.13 by $0.03. Kratos Defense & Security Solutions had a return on equity of 2.82% and a net margin of 2.08%.The business had revenue of $371.00 million for the quarter, compared to analysts' expectations of $345.00 million. During the same quarter in the prior year, the business earned $0.12 EPS. The firm's revenue for the quarter was up 22.6% on a year-over-year basis. As a group, research analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.48 EPS for the current fiscal year.

Insider Activity at Kratos Defense & Security Solutions

In related news, insider Stacey G. Rock sold 4,675 shares of Kratos Defense & Security Solutions stock in a transaction dated Tuesday, June 30th. The shares were sold at an average price of $50.00, for a total transaction of $233,750.00. Following the completion of the sale, 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 position. The sale was disclosed in a filing with the SEC, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Deanna H. Lund sold 5,000 shares of the company's stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $52.85, for a total transaction of $264,250.00. Following the completion of the transaction, the chief financial officer owned 285,405 shares in the company, valued at approximately $15,083,654.25. This trade represents a 1.72% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 148,036 shares of company stock worth $8,455,857 in the last quarter. 1.50% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Large investors have recently made changes to their positions in the company. Ausbil Investment Management Ltd acquired a new stake in Kratos Defense & Security Solutions during the 2nd quarter worth approximately $296,000. Hennion & Walsh Asset Management Inc. grew its holdings in Kratos Defense & Security Solutions by 4.0% in the 2nd quarter. Hennion & Walsh Asset Management Inc. now owns 72,660 shares of the aerospace company's stock valued at $3,623,000 after buying an additional 2,808 shares in the last quarter. Polianta Ltd bought a new position in Kratos Defense & Security Solutions during the 2nd quarter worth $1,600,000. Assenagon Asset Management S.A. increased its position in Kratos Defense & Security Solutions by 80.2% during the 2nd quarter. Assenagon Asset Management S.A. now owns 70,254 shares of the aerospace company's stock worth $3,503,000 after buying an additional 31,273 shares during the period. Finally, Byrne Asset Management LLC acquired a new stake in shares of Kratos Defense & Security Solutions during the second quarter worth $124,000. Institutional investors own 75.92% of the company's stock.

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.

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