Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Up 8.5% Following Strong Earnings

Key Points

• Kratos Defense & Security Solutions reported strong earnings with $0.11 earnings per share, exceeding analysts' expectations of $0.09, leading to an 8.5% increase in stock price during trading.
• The company’s quarterly revenue reached $351.50 million, significantly higher than the anticipated $305.67 million, reflecting a year-over-year growth of 17.1%.
• Several analysts have upgraded their price targets for Kratos, with JMP Securities setting a high target of $70.00, while the average target price stands at $50.08.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price traded up 8.5% during trading on Friday following a better than expected earnings announcement. The company traded as high as $66.13 and last traded at $64.10. 3,062,152 shares changed hands during mid-day trading, a decline of 7% from the average session volume of 3,285,037 shares. The stock had previously closed at $59.08.

The aerospace company reported $0.11 earnings per share for the quarter, beating analysts' consensus estimates of $0.09 by $0.02. Kratos Defense & Security Solutions had a net margin of 1.68% and a return on equity of 3.85%. The firm had revenue of $351.50 million for the quarter, compared to analyst estimates of $305.67 million. During the same quarter in the previous year, the firm posted $0.14 earnings per share. The business's revenue was up 17.1% on a year-over-year basis.

Wall Street Analyst Weigh In

A number of equities research analysts have recently issued reports on the company. JPMorgan Chase & Co. upped their price objective on Kratos Defense & Security Solutions from $44.00 to $48.00 and gave the stock a "neutral" rating in a research note on Monday, June 30th. Benchmark lifted their price objective on shares of Kratos Defense & Security Solutions from $48.00 to $50.00 and gave the company a "buy" rating in a research report on Tuesday, July 8th. JMP Securities set a $70.00 target price on shares of Kratos Defense & Security Solutions and gave the company a "market outperform" rating in a report on Tuesday, July 22nd. Citigroup reiterated a "market outperform" rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, July 22nd. Finally, Wall Street Zen downgraded Kratos Defense & Security Solutions from a "hold" rating to a "sell" rating in a research report on Thursday, May 22nd. One equities research analyst has rated the stock with a sell rating, two have given a hold rating and eleven have given a buy rating to the stock. Based on data from MarketBeat.com, the company currently has an average rating of "Moderate Buy" and an average target price of $50.08.

Insider Buying and Selling

In other news, insider Stacey G. Rock sold 4,000 shares of the firm's stock in a transaction that occurred on Friday, August 1st. The shares were sold at an average price of $55.51, for a total transaction of $222,040.00. Following the transaction, the insider directly owned 42,154 shares of the company's stock, valued at approximately $2,339,968.54. This trade represents a 8.67% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, SVP Marie Mendoza sold 2,000 shares of the business's stock in a transaction that occurred on Tuesday, July 15th. The shares were sold at an average price of $50.97, for a total value of $101,940.00. Following the completion of the sale, the senior vice president owned 65,535 shares of the company's stock, valued at approximately $3,340,318.95. This trade represents a 2.96% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have sold a total of 145,572 shares of company stock valued at $5,644,656 in the last 90 days. 2.37% of the stock is currently owned by corporate insiders.

Institutional Trading of Kratos Defense & Security Solutions

Institutional investors have recently modified their holdings of the stock. Vanguard Group Inc. lifted its position in Kratos Defense & Security Solutions by 11.7% during the first quarter. Vanguard Group Inc. now owns 16,447,687 shares of the aerospace company's stock worth $488,332,000 after purchasing an additional 1,728,179 shares during the period. ARK Investment Management LLC lifted its holdings in shares of Kratos Defense & Security Solutions by 22.2% during the 2nd quarter. ARK Investment Management LLC now owns 4,507,692 shares of the aerospace company's stock worth $209,382,000 after acquiring an additional 818,104 shares during the period. FMR LLC boosted its position in shares of Kratos Defense & Security Solutions by 7.6% during the 4th quarter. FMR LLC now owns 4,340,795 shares of the aerospace company's stock worth $114,510,000 after acquiring an additional 307,907 shares in the last quarter. Geode Capital Management LLC increased its stake in Kratos Defense & Security Solutions by 8.3% in the second quarter. Geode Capital Management LLC now owns 3,949,763 shares of the aerospace company's stock valued at $183,490,000 after acquiring an additional 301,135 shares during the last quarter. Finally, Ameriprise Financial Inc. raised its position in Kratos Defense & Security Solutions by 6.9% during the fourth quarter. Ameriprise Financial Inc. now owns 3,130,109 shares of the aerospace company's stock valued at $82,576,000 after purchasing an additional 203,245 shares in the last quarter. 75.92% of the stock is currently owned by institutional investors.

Kratos Defense & Security Solutions Stock Up 9.5%

The firm has a 50 day simple moving average of $48.25 and a two-hundred day simple moving average of $37.46. The company has a quick ratio of 2.26, a current ratio of 2.84 and a debt-to-equity ratio of 0.17. The stock has a market capitalization of $9.93 billion, a P/E ratio of 497.82 and a beta of 1.04.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc engages in the provision of mission critical products, services and solutions for United States national security priorities. It operates through the Kratos Government Solutions (KGS) and Unmanned Systems (US) segments. The KGS segment consists of an aggregation of KGS operating segments, including microwave electronic products, space, satellite and cyber, training solutions.

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