Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Down 6% - Should You Sell?

Key Points

• Kratos Defense & Security Solutions shares fell 6% on Tuesday, trading as low as $49.76 before closing near $50.34, well below the prior close of $53.54.
• Wall Street remains broadly positive on KTOS despite some mixed target changes, with a consensus rating of “Moderate Buy” and an average price target of $100.44.
• The company posted strong quarterly results, reporting EPS of $0.16 versus the $0.13 estimate and revenue of $371 million, up 22.6% year over year.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s share price fell 6% during trading on Tuesday . The company traded as low as $49.76 and last traded at $50.34. Approximately 3,615,823 shares were traded during trading, a decline of 21% from the average daily volume of 4,598,861 shares. The stock had previously closed at $53.54.

Analysts Set New Price Targets

KTOS has been the topic of a number of recent research reports. Royal Bank Of Canada reduced their target price on shares of Kratos Defense & Security Solutions from $100.00 to $80.00 and set an "outperform" rating on the stock in a report on Thursday, May 7th. Canaccord Genuity Group boosted their price objective on shares of Kratos Defense & Security Solutions from $125.00 to $130.00 and gave the company a "buy" rating in a research report on Thursday, May 7th. Weiss Ratings reissued a "hold (c)" rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, April 21st. BNP Paribas Exane raised their target price on shares of Kratos Defense & Security Solutions from $80.00 to $85.00 and gave the stock a "neutral" rating in a research report on Thursday, May 7th. Finally, Wedbush initiated 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 target price for the company. Three equities research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating and four have given a Hold rating to the company. According to data from MarketBeat.com, Kratos Defense & Security Solutions currently has a consensus rating of "Moderate Buy" and a consensus target price of $100.44.

Kratos Defense & Security Solutions Stock Performance

The company has a market cap of $9.44 billion, a price-to-earnings ratio of 296.12 and a beta of 1.07. The company has a current ratio of 5.63, a quick ratio of 5.08 and a debt-to-equity ratio of 0.04. The stock's 50 day moving average price is $56.40 and its 200 day moving average price is $77.55.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last released its earnings results on Wednesday, May 6th. The aerospace company reported $0.16 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.13 by $0.03. Kratos Defense & Security Solutions had a net margin of 2.08% and a return on equity of 2.82%. The business had revenue of $371.00 million for the quarter, compared to analysts' expectations of $345.00 million. During the same period last year, the company earned $0.12 earnings per share. The company's quarterly revenue was up 22.6% on a year-over-year basis. On average, analysts expect 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, CFO Deanna H. Lund sold 5,000 shares of Kratos Defense & Security Solutions stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $52.85, for a total value of $264,250.00. Following 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 ownership of the stock. The sale was disclosed in a legal 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, insider Phillip D. Carrai sold 6,500 shares of the business's stock in a transaction dated Monday, June 15th. The shares were sold at an average price of $57.74, for a total value of $375,310.00. Following the sale, the insider directly owned 215,052 shares of the company's stock, valued at approximately $12,417,102.48. This trade represents a 2.93% 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. Over the last three months, insiders sold 161,453 shares of company stock worth $9,561,063. 1.50% of the stock is owned by corporate insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Hedge funds and other institutional investors have recently modified their holdings of the company. Geode Capital Management LLC raised its holdings in Kratos Defense & Security Solutions by 3.5% in 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 buying an additional 148,622 shares during the period. Morgan Stanley increased its position in shares of Kratos Defense & Security Solutions by 3.9% in the fourth quarter. Morgan Stanley now owns 3,311,095 shares of the aerospace company's stock worth $251,345,000 after acquiring an additional 124,607 shares in the last quarter. Invesco Ltd. increased its position in shares of 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. Alliancebernstein L.P. raised its stake in shares of Kratos Defense & Security Solutions by 1,389.0% in the 3rd quarter. Alliancebernstein L.P. now owns 2,707,776 shares of the aerospace company's stock valued at $247,409,000 after acquiring an additional 2,525,921 shares during the period. Finally, Northern Trust Corp raised its stake in shares of Kratos Defense & Security Solutions by 13.6% in the 3rd quarter. Northern Trust Corp now owns 2,072,700 shares of the aerospace company's stock valued at $189,383,000 after acquiring an additional 247,652 shares during the period. 75.92% of the stock is owned by institutional investors and hedge funds.

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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