Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Gap Up - Here's Why

Key Points

• KTOS gapped up — the stock opened at $84.91 after closing at $79.29 and last traded around $86.32 on ~1.16M shares, coinciding with analyst moves including Canaccord raising its price target to $120 and a consensus rating of "Moderate Buy" (avg. PT $82.53).
• Quarterly results beat expectations — Kratos reported $0.14 EPS vs. $0.12 est. and revenue of $347.6M vs. $323.0M est., with revenue up 26% year-over-year, though the shares trade at a very high P/E (~688x) on a $15.1B market cap.
• Insider selling notable — insiders sold 663,865 shares (~$50.9M) over the past three months (insider ownership 2.37%), while institutional investors own about 75.92% of the stock.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) gapped up before the market opened on Monday . The stock had previously closed at $79.29, but opened at $84.91. Kratos Defense & Security Solutions shares last traded at $86.3230, with a volume of 1,158,635 shares.

Analyst Upgrades and Downgrades

A number of equities analysts recently issued reports on KTOS shares. Weiss Ratings reiterated a "hold (c)" rating on shares of Kratos Defense & Security Solutions in a research report on Wednesday, October 8th. Citigroup reiterated an "outperform" rating on shares of Kratos Defense & Security Solutions in a report on Thursday, October 2nd. Canaccord Genuity Group raised their price objective on Kratos Defense & Security Solutions from $74.00 to $120.00 and gave the company a "buy" rating in a report on Thursday, October 9th. B. Riley cut Kratos Defense & Security Solutions from a "buy" rating to a "neutral" rating and upped their target price for the stock from $72.00 to $105.00 in a report on Wednesday, October 8th. Finally, BNP Paribas set a $80.00 price target on Kratos Defense & Security Solutions in a research note on Tuesday, November 18th. One investment analyst has rated the stock with a Strong Buy rating, fourteen have issued a Buy rating and six have given a Hold rating to the company. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average price target of $82.53.

Kratos Defense & Security Solutions Price Performance

The company has a quick ratio of 3.68, a current ratio of 4.30 and a debt-to-equity ratio of 0.04. The business has a 50-day moving average price of $77.33 and a two-hundred day moving average price of $71.16. The company has a market capitalization of $15.10 billion, a price-to-earnings ratio of 688.09 and a beta of 1.09.

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

Insider Buying and Selling at Kratos Defense & Security Solutions

In other Kratos Defense & Security Solutions news, insider Stacey G. Rock sold 8,549 shares of the stock in a transaction dated Thursday, December 18th. The shares were sold at an average price of $71.45, for a total transaction of $610,826.05. Following the completion of the transaction, the insider owned 30,283 shares in the company, valued at $2,163,720.35. This trade represents a 22.02% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through this link. Also, insider Steven S. Fendley sold 7,000 shares of the stock in a transaction on Monday, December 29th. The stock was sold at an average price of $76.57, for a total value of $535,990.00. Following the sale, the insider owned 318,435 shares in the company, valued at approximately $24,382,567.95. This represents a 2.15% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 663,865 shares of company stock valued at $50,935,776 in the last three months. 2.37% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently bought and sold shares of KTOS. Bayforest Capital Ltd bought a new stake in shares of Kratos Defense & Security Solutions in the 3rd quarter valued at about $32,000. Caitlin John LLC purchased a new position in shares of Kratos Defense & Security Solutions in the 3rd quarter valued at approximately $32,000. Whittier Trust Co. purchased a new stake in shares of Kratos Defense & Security Solutions in the 3rd quarter worth approximately $38,000. Accredited Wealth Management LLC raised its holdings in Kratos Defense & Security Solutions by 193.5% in the third quarter. Accredited Wealth Management LLC now owns 408 shares of the aerospace company's stock worth $37,000 after buying an additional 269 shares during the last quarter. Finally, CI Investments Inc. lifted its position in Kratos Defense & Security Solutions by 142.7% in the 3rd quarter. CI Investments Inc. now owns 432 shares of the aerospace company's stock valued at $39,000 after acquiring an additional 254 shares in the last quarter. 75.92% of the stock is currently owned by 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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