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

Key Points

• Kratos shares gapped higher, opening at $66.00 versus a prior close of $62.79, and last traded near $63.88.
• Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $99.47, despite several recent target reductions.
• The company beat quarterly estimates with $0.21 EPS versus $0.14 expected and revenue of $458.8 million, up 30.5% year over year; however, the stock trades at a high P/E ratio of 376.11, while insiders sold about $7.5 million in shares over the last quarter.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s share price gapped up before the market opened on Friday . The stock had previously closed at $62.79, but opened at $66.00. Kratos Defense & Security Solutions shares last traded at $63.8780, with a volume of 1,368,454 shares.

Analyst Upgrades and Downgrades

Several research analysts have commented on the stock. JPMorgan Chase & Co. raised shares of Kratos Defense & Security Solutions from a "neutral" rating to an "overweight" rating and cut their price target for the company from $99.00 to $82.00 in a report on Friday, June 12th. Stifel Nicolaus decreased their price target on shares of Kratos Defense & Security Solutions from $134.00 to $115.00 and set a "buy" rating on the stock in a report on Thursday, August 6th. Piper Sandler upgraded Kratos Defense & Security Solutions from a "neutral" rating to an "overweight" rating and set a $75.00 price objective on the stock in a research report on Wednesday, August 5th. Truist Financial dropped their price objective on Kratos Defense & Security Solutions from $135.00 to $104.00 and set a "buy" rating for the company in a research note on Thursday. Finally, Cantor Fitzgerald reduced their target price on Kratos Defense & Security Solutions from $115.00 to $100.00 and set an "overweight" rating for the company in a research report on Tuesday, August 4th. One research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, two have given a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $99.47.

Kratos Defense & Security Solutions Trading Up 2.3%

The company has a quick ratio of 4.99, a current ratio of 5.54 and a debt-to-equity ratio of 0.04. The firm has a market capitalization of $12.06 billion, a P/E ratio of 376.11 and a beta of 1.08. The firm's 50-day simple moving average is $52.36 and its 200-day simple moving average is $68.59.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The aerospace company reported $0.21 EPS for the quarter, topping analysts' consensus estimates of $0.14 by $0.07. The firm had revenue of $458.80 million for the quarter, compared to analyst estimates of $410.36 million. Kratos Defense & Security Solutions had a net margin of 2.03% and a return on equity of 3.07%. The business's revenue for the quarter was up 30.5% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $0.11 EPS. Analysts anticipate that Kratos Defense & Security Solutions, Inc. will post 0.58 EPS for the current year.

Insiders Place Their Bets

In other Kratos Defense & Security Solutions news, insider Jonah Adelman sold 31,348 shares of the firm's stock in a transaction dated Tuesday, May 26th. The stock was sold at an average price of $57.06, for a total transaction of $1,788,716.88. Following the sale, the insider owned 8,000 shares in the company, valued at $456,480. This trade represents a 79.67% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Steven S. Fendley sold 35,000 shares of Kratos Defense & Security Solutions stock in a transaction dated Monday, June 8th. The stock was sold at an average price of $58.23, for a total value of $2,038,050.00. Following the sale, the insider directly owned 309,087 shares of the company's stock, valued at approximately $17,998,136.01. This trade represents a 10.17% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders have sold 133,523 shares of company stock valued at $7,484,747 over the last quarter. Insiders own 1.50% of the company's stock.

Institutional Trading of Kratos Defense & Security Solutions

Several hedge funds and other institutional investors have recently bought and sold shares of the company. Corient Private Wealth LLC raised its stake in shares of Kratos Defense & Security Solutions by 7,701.6% during the fourth quarter. Corient Private Wealth LLC now owns 1,593,549 shares of the aerospace company's stock worth $120,966,000 after acquiring an additional 1,573,123 shares in the last quarter. Norges Bank purchased a new stake in shares of Kratos Defense & Security Solutions in the 4th quarter valued at $104,807,000. Bank of New York Mellon Corp purchased a new stake in shares of Kratos Defense & Security Solutions in the 2nd quarter valued at $65,293,000. Paradigm Capital Management Inc. NY bought a new position in shares of Kratos Defense & Security Solutions during the 2nd quarter valued at $34,842,000. Finally, Goldman Sachs Group Inc. grew its holdings in shares of Kratos Defense & Security Solutions by 66.0% during the 4th quarter. Goldman Sachs Group Inc. now owns 1,398,525 shares of the aerospace company's stock valued at $106,162,000 after purchasing an additional 556,036 shares during the last quarter. Hedge funds and other 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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