Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading 4.4% Higher - Should You Buy?

Key Points

• KTOS shares rose 4.4% to about $49.45 in Monday trading, although volume was 39% below the average session level.
• Analysts maintain a broadly positive outlook, with a consensus rating of “Moderate Buy” and an average price target of $101.29, despite recent target reductions from some firms.
• Kratos beat quarterly expectations with $0.16 EPS versus $0.13 forecast and revenue of $371 million, up 22.6% year over year; however, the stock trades at a very high P/E ratio of 290.88, while insiders have sold $8.0 million in shares over the past 90 days.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) shares shot up 4.4% during trading on Monday . The company traded as high as $49.72 and last traded at $49.45. Approximately 2,747,338 shares traded hands during mid-day trading, a decline of 39% from the average session volume of 4,497,442 shares. The stock had previously closed at $47.35.

Wall Street Analysts Forecast Growth

Several equities research analysts recently weighed in on the company. UBS Group restated a "neutral" rating and set a $82.00 price target on shares of Kratos Defense & Security Solutions in a research report on Thursday, May 7th. Piper Sandler decreased their price objective on Kratos Defense & Security Solutions from $99.00 to $75.00 and set a "neutral" rating for the company in a report on Thursday, May 7th. Clear Str raised Kratos Defense & Security Solutions to a "strong-buy" rating in a research report on Wednesday, April 29th. Jefferies Financial Group restated a "buy" rating and set a $80.00 target price on shares of Kratos Defense & Security Solutions in a report on Wednesday, July 8th. Finally, BTIG Research reduced their target price on shares of Kratos Defense & Security Solutions from $115.00 to $100.00 and set a "buy" rating on the stock in a research report on Thursday, May 7th. Three equities research analysts have rated the stock with a Strong Buy rating, sixteen have assigned a Buy rating and four have issued a Hold rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $101.29.

Kratos Defense & Security Solutions Stock Performance

The company has a debt-to-equity ratio of 0.04, a quick ratio of 5.08 and a current ratio of 5.63. The stock has a market capitalization of $9.27 billion, a P/E ratio of 290.88 and a beta of 1.07. The business has a 50-day moving average price of $53.57 and a 200 day moving average price of $74.63.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last posted its quarterly earnings data on Wednesday, May 6th. The aerospace company reported $0.16 earnings per share for the quarter, beating analysts' consensus estimates of $0.13 by $0.03. The company had revenue of $371.00 million during the quarter, compared to analyst estimates of $345.00 million. Kratos Defense & Security Solutions had a return on equity of 2.82% and a net margin of 2.08%.The firm's revenue for the quarter was up 22.6% on a year-over-year basis. During the same quarter last year, the company earned $0.12 EPS. As a group, sell-side analysts forecast that Kratos Defense & Security Solutions, Inc. will post 0.48 EPS for the current fiscal year.

Insider Transactions at Kratos Defense & Security Solutions

In related news, insider David M. Carter sold 4,000 shares of the company's stock in a transaction dated Wednesday, July 8th. The shares were sold at an average price of $50.45, for a total value of $201,800.00. Following the transaction, the insider owned 66,238 shares in the company, valued at $3,341,707.10. The trade was a 5.69% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Steven S. Fendley sold 7,000 shares of the stock in a transaction dated Monday, June 29th. The shares were sold at an average price of $48.37, for a total transaction of $338,590.00. Following the sale, the insider directly owned 302,126 shares in the company, valued at $14,613,834.62. This trade represents a 2.26% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 141,036 shares of company stock valued at $8,024,377. 1.50% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in KTOS. Ausbil Investment Management Ltd purchased a new stake in shares of Kratos Defense & Security Solutions during the second quarter valued at approximately $296,000. Hennion & Walsh Asset Management Inc. raised its holdings in Kratos Defense & Security Solutions by 4.0% in the 2nd quarter. Hennion & Walsh Asset Management Inc. now owns 72,660 shares of the aerospace company's stock worth $3,623,000 after acquiring an additional 2,808 shares during the last quarter. Polianta Ltd bought a new position in Kratos Defense & Security Solutions in the 2nd quarter valued at approximately $1,600,000. Assenagon Asset Management S.A. lifted its position in Kratos Defense & Security Solutions by 80.2% in the 2nd quarter. Assenagon Asset Management S.A. now owns 70,254 shares of the aerospace company's stock valued at $3,503,000 after acquiring an additional 31,273 shares in the last quarter. Finally, Byrne Asset Management LLC purchased a new stake in Kratos Defense & Security Solutions during the 2nd quarter valued at $124,000. 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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