Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading 5.4% Higher on Better-Than-Expected Earnings

Key Points

• Kratos shares rose 5.4% after the company reported quarterly EPS of $0.21, beating the $0.14 consensus, while revenue of $458.8 million exceeded expectations of $410.4 million and grew 30.5% year over year.
• The company projects approximately $1.8 billion in fiscal 2026 revenue, above the roughly $1.7 billion analyst consensus, though third-quarter guidance of $460 million to $480 million is broadly in line with expectations.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating and a $100.41 price target; however, insiders have sold 139,036 shares worth about $7.8 million over the past 90 days.

Shares of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) rose 5.4% during trading on Tuesday after the company announced better than expected quarterly earnings. The company traded as high as $52.27 and last traded at $51.87. Approximately 6,042,358 shares traded hands during mid-day trading, an increase of 35% from the average daily volume of 4,461,702 shares. The stock had previously closed at $49.21.

The aerospace company reported $0.21 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.14 by $0.07. The company had revenue of $458.80 million during the quarter, compared to the consensus estimate of $410.38 million. Kratos Defense & Security Solutions had a net margin of 2.08% and a return on equity of 2.82%.

More Kratos Defense & Security Solutions News

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

• Positive Sentiment: Kratos reported second-quarter EPS of $0.21, above the $0.14 analyst consensus, while revenue reached $458.8 million versus expectations of $410.4 million. Revenue increased 30.5% year over year, including 19.1% organic growth, indicating robust demand across its aerospace and defense businesses. Kratos Reports Second Quarter 2026 Financial Results
• Positive Sentiment: The company guided for approximately $1.8 billion in fiscal 2026 revenue, above the roughly $1.7 billion consensus estimate. The improved outlook supports investor expectations for continued growth from defense and next-generation aerospace programs.
• Positive Sentiment: Cantor Fitzgerald maintained an “overweight” rating despite lowering its price target from $115 to $100. The revised target still implies substantial upside, suggesting the analyst views the recent pullback as an attractive entry point. Cantor Fitzgerald Price Target Update
• Neutral Sentiment: Third-quarter revenue guidance of $460 million to $480 million brackets the $462.8 million consensus estimate. While the range points to continued growth, its midpoint is only modestly above expectations and may limit near-term upside surprises.
• Positive Sentiment: Market commentary continues to identify Kratos as a potential beneficiary of rising Pentagon spending and long-term drone demand, supporting the broader investment case despite volatility in defense and drone stocks. Three Drone Stocks That Should Soar After the Summer Slump

Wall Street Analysts Forecast Growth

KTOS has been the subject of a number of research analyst reports. The Goldman Sachs Group cut their target price on shares of Kratos Defense & Security Solutions from $100.00 to $89.00 and set a "buy" rating for the company in a research report on Tuesday, July 14th. Wedbush began coverage on shares of Kratos Defense & Security Solutions in a research note on Tuesday, June 30th. They set an "outperform" rating and a $85.00 price target on the stock. Citigroup restated a "market outperform" rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, July 28th. Canaccord Genuity Group raised their price objective on shares of Kratos Defense & Security Solutions from $125.00 to $130.00 and gave the stock a "buy" rating in a report on Thursday, May 7th. Finally, Piper Sandler decreased their target price on shares of Kratos Defense & Security Solutions from $99.00 to $75.00 and set a "neutral" rating on the stock in a research report on Thursday, May 7th. Three investment analysts have rated the stock with a Strong Buy rating, sixteen have given a Buy rating and four have issued a Hold rating to the company. According to data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $100.41.

Insider Buying and Selling at Kratos Defense & Security Solutions

In other Kratos Defense & Security Solutions news, insider David M. Carter sold 4,000 shares of the business'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 directly owned 66,238 shares in the company, valued at $3,341,707.10. The trade was a 5.69% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Stacey G. Rock sold 4,675 shares of the company's stock in a transaction dated Tuesday, June 30th. The stock was sold at an average price of $50.00, for a total transaction of $233,750.00. Following the sale, the insider directly owned 9,600 shares in the company, valued at $480,000. This represents a 32.75% 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. Insiders have sold a total of 139,036 shares of company stock worth $7,799,667 over the last ninety days. Company insiders own 1.50% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently added to or reduced their stakes in the stock. Corient Private Wealth LLC boosted its stake 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 valued at $120,966,000 after purchasing an additional 1,573,123 shares during the last quarter. Norges Bank acquired a new stake in shares of Kratos Defense & Security Solutions during the 4th quarter worth approximately $104,807,000. Goldman Sachs Group Inc. raised its stake in shares of Kratos Defense & Security Solutions by 66.0% during the fourth quarter. Goldman Sachs Group Inc. now owns 1,398,525 shares of the aerospace company's stock worth $106,162,000 after buying an additional 556,036 shares during the last quarter. Clearbridge Investments LLC raised its stake in shares of Kratos Defense & Security Solutions by 48.5% during the fourth quarter. Clearbridge Investments LLC now owns 1,458,084 shares of the aerospace company's stock worth $110,683,000 after buying an additional 476,049 shares during the last quarter. Finally, FengHe Fund Management Pte. Ltd. acquired a new position in Kratos Defense & Security Solutions in the fourth quarter valued at approximately $35,291,000. Institutional investors and hedge funds own 75.92% of the company's stock.

Kratos Defense & Security Solutions Price Performance

The firm has a market capitalization of $9.73 billion, a price-to-earnings ratio of 305.12 and a beta of 1.08. The company has a quick ratio of 5.08, a current ratio of 5.63 and a debt-to-equity ratio of 0.04. The company's fifty day moving average is $52.63 and its two-hundred day moving average is $72.13.

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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