Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Gap Up - Still a Buy?

Key Points

• Shares gapped up — KTOS opened at $92.42 after a $86.18 close and was last near $96.13 on heavy volume, while analysts are largely positive (consensus "Moderate Buy", average target $98.28) with several firms raising targets into the $115–$134 range.
• Kratos beat quarterly expectations, reporting $0.18 EPS vs. $0.14 expected and $345.1M revenue (up 21.9% YoY), and analysts project roughly $0.31 EPS for the fiscal year.
• Insider selling was significant (582,907 shares, ~$50.8M) last quarter even as institutional ownership is high (~75.9%); the company shows low leverage and strong liquidity (debt/equity 0.05, current ratio 4.06) but an extremely high P/E (~689.6).

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price gapped up prior to trading on Monday . The stock had previously closed at $86.18, but opened at $92.42. Kratos Defense & Security Solutions shares last traded at $96.1290, with a volume of 4,012,801 shares changing hands.

Wall Street Analyst Weigh In

A number of brokerages have recently issued reports on KTOS. Cantor Fitzgerald restated an "overweight" rating and set a $115.00 price objective on shares of Kratos Defense & Security Solutions in a report on Tuesday, February 24th. The Goldman Sachs Group lifted their target price on shares of Kratos Defense & Security Solutions from $93.00 to $125.00 and gave the stock a "buy" rating in a research report on Tuesday, January 20th. Citizens Jmp raised their price target on shares of Kratos Defense & Security Solutions from $105.00 to $125.00 and gave the company a "market outperform" rating in a research note on Monday, January 12th. Stifel Nicolaus boosted their price objective on shares of Kratos Defense & Security Solutions from $112.00 to $134.00 and gave the stock a "buy" rating in a research note on Tuesday, January 13th. Finally, Noble Financial restated an "outperform" rating on shares of Kratos Defense & Security Solutions in a report on Tuesday, January 20th. One analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and six have issued a Hold rating to the company's stock. According to data from MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and a consensus target price of $98.28.

Kratos Defense & Security Solutions Stock Performance

The company has a debt-to-equity ratio of 0.05, a quick ratio of 3.46 and a current ratio of 4.06. The company's 50 day moving average price is $98.13 and its 200-day moving average price is $85.28. The stock has a market cap of $15.22 billion, a P/E ratio of 689.61 and a beta of 1.12.

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

Insider Activity at Kratos Defense & Security Solutions

In other news, CFO Deanna H. Lund sold 25,000 shares of the business's stock in a transaction dated Tuesday, December 2nd. The stock was sold at an average price of $72.02, for a total value of $1,800,500.00. Following the completion of the sale, the chief financial officer owned 248,285 shares of the company's stock, valued at approximately $17,881,485.70. The trade was a 9.15% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. Also, Director Scott I. Anderson sold 15,401 shares of the stock in a transaction on Monday, December 15th. The shares were sold at an average price of $74.51, for a total transaction of $1,147,528.51. Following the sale, the director directly owned 66,334 shares of the company's stock, valued at $4,942,546.34. The trade was a 18.84% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 582,907 shares of company stock worth $50,754,943 in the last quarter. 2.37% of the stock is owned by company insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Several hedge funds and other institutional investors have recently modified their holdings of the company. Alliancebernstein L.P. grew its holdings in Kratos Defense & Security Solutions by 1,389.0% during the 3rd quarter. Alliancebernstein L.P. now owns 2,707,776 shares of the aerospace company's stock valued at $247,409,000 after purchasing an additional 2,525,921 shares during the last quarter. Rovida Advisors Inc. purchased a new stake in Kratos Defense & Security Solutions in the 2nd quarter valued at about $82,315,000. Corient Private Wealth LLC lifted its holdings in shares of Kratos Defense & Security Solutions by 7,701.6% in the 4th quarter. Corient Private Wealth LLC now owns 1,593,549 shares of the aerospace company's stock worth $120,966,000 after buying an additional 1,573,123 shares during the period. Norges Bank purchased a new position in shares of Kratos Defense & Security Solutions during the fourth quarter valued at $104,807,000. Finally, Franklin Resources Inc. raised its holdings in shares of Kratos Defense & Security Solutions by 29.6% in the second quarter. Franklin Resources Inc. now owns 5,086,494 shares of the aerospace company's stock valued at $236,268,000 after acquiring an additional 1,162,577 shares in the last quarter. 75.92% of the stock is 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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