Kratos Defense & Security Solutions (NASDAQ:KTOS) Stock Price Down 6.3% - Should You Sell?

Key Points

• Share price drop: Kratos shares fell 6.3% intraday to $120.59 (low $114.28) with ~6.6M shares traded, about 38% above average volume.
• Analyst stance vs. price: The stock carries a "Moderate Buy" consensus, but the average price target is $93.06, well below the current share price.
• Mixed fundamentals and insider activity: The company beat quarterly revenue and EPS estimates (revenue +26% y/y), yet valuation is stretched (PE ~927) and insiders sold ~911,815 shares in the past 90 days.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s share price dropped 6.3% during trading on Wednesday . The stock traded as low as $114.28 and last traded at $120.59. Approximately 6,613,420 shares were traded during mid-day trading, an increase of 38% from the average daily volume of 4,782,085 shares. The stock had previously closed at $128.68.

Analyst Ratings Changes

KTOS has been the topic of a number of recent analyst reports. Jefferies Financial Group restated a "hold" rating and set a $85.00 price target on shares of Kratos Defense & Security Solutions in a research note on Thursday, November 6th. Jones Trading began coverage on shares of Kratos Defense & Security Solutions in a report on Monday, January 5th. They set a "buy" rating on the stock. Robert W. Baird raised their target price on Kratos Defense & Security Solutions from $70.00 to $87.00 and gave the stock an "outperform" rating in a research note on Friday, September 26th. BTIG Research lifted their price target on Kratos Defense & Security Solutions from $80.00 to $95.00 and gave the stock a "buy" rating in a research report on Thursday, November 6th. Finally, BNP Paribas Exane set a $80.00 price objective on Kratos Defense & Security Solutions in a report on Tuesday, November 18th. One research analyst has rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and five have issued a Hold rating to the stock. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average price target of $93.06.

Kratos Defense & Security Solutions Stock Performance

The firm's fifty day simple moving average is $85.20 and its 200 day simple moving average is $77.40. The company has a market capitalization of $20.36 billion, a PE ratio of 927.69 and a beta of 1.09. The company has a debt-to-equity ratio of 0.04, a current ratio of 4.30 and a quick ratio of 3.68.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its quarterly earnings data 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. Kratos Defense & Security Solutions had a return on equity of 3.14% and a net margin of 1.56%.The business had revenue of $347.60 million during the quarter, compared to analysts' expectations of $323.01 million. During the same quarter in the previous year, the firm posted $0.11 EPS. The company's revenue for the quarter was up 26.0% on a year-over-year basis. On average, research analysts predict 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 related news, insider Stacey G. Rock sold 16,568 shares of the business's stock in a transaction on Monday, January 12th. The shares were sold at an average price of $116.74, for a total value of $1,934,148.32. Following the completion of the transaction, the insider directly owned 26,487 shares in the company, valued at $3,092,092.38. The trade was a 38.48% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. Also, SVP Marie Mendoza sold 1,676 shares of the firm's stock in a transaction on Thursday, January 15th. The shares were sold at an average price of $120.18, for a total transaction of $201,421.68. Following the sale, the senior vice president owned 63,393 shares in the company, valued at approximately $7,618,570.74. This represents a 2.58% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 911,815 shares of company stock worth $74,226,491. 2.37% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

A number of large investors have recently bought and sold shares of KTOS. Franklin Resources Inc. grew its holdings in 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 purchasing an additional 1,162,577 shares during the period. ARK Investment Management LLC lifted its position 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 valued at $209,382,000 after buying an additional 818,104 shares in the last quarter. Geode Capital Management LLC grew its stake in Kratos Defense & Security Solutions by 8.3% in the 2nd 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 period. First Trust Advisors LP increased its holdings in Kratos Defense & Security Solutions by 29.5% in the 3rd quarter. First Trust Advisors LP now owns 3,068,863 shares of the aerospace company's stock worth $280,402,000 after acquiring an additional 698,778 shares in the last quarter. Finally, Invesco Ltd. raised its position in Kratos Defense & Security Solutions by 7.4% during 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 during the period. Institutional investors and hedge funds 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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