Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading 6.3% Higher - Should You Buy?

Key Points

• Stock jump: Kratos shares surged 6.3% to about $92.47 intraday on Monday with ~5.22 million shares traded, roughly 13% above average volume.
• Analyst sentiment: Several brokers raised price targets (Goldman, Citizens, BTIG, Truist), leaving a consensus rating of Moderate Buy and an average target of $98.28.
• Fundamentals and risks: The latest quarter beat estimates with $345.1M revenue (+21.9% YoY) and $0.18 EPS, but valuation is very rich (P/E ~711) and insiders sold about 574,731 shares (~$50.5M) in the past three months.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price shot up 6.3% during trading on Monday . The company traded as high as $93.67 and last traded at $92.47. 5,222,181 shares traded hands during mid-day trading, an increase of 13% from the average session volume of 4,634,828 shares. The stock had previously closed at $87.00.

Wall Street Analyst Weigh In

Several brokerages recently issued reports on KTOS. Noble Financial restated an "outperform" rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, January 20th. Citizens Jmp boosted their target price on shares of Kratos Defense & Security Solutions from $105.00 to $125.00 and gave the company a "market outperform" rating in a research note on Monday, January 12th. The Goldman Sachs Group increased their target price on shares of Kratos Defense & Security Solutions from $93.00 to $125.00 and gave the stock a "buy" rating in a report on Tuesday, January 20th. Truist Financial set a $135.00 price target on shares of Kratos Defense & Security Solutions in a research report on Friday, January 9th. Finally, BTIG Research boosted their price objective on shares of Kratos Defense & Security Solutions from $95.00 to $115.00 and gave the company a "buy" rating in a research report on Tuesday, February 24th. One research analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and six have assigned a Hold rating to the stock. Based on data from MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus target price of $98.28.

Kratos Defense & Security Solutions Stock Up 6.3%

The firm has a market cap of $17.27 billion, a price-to-earnings ratio of 711.36 and a beta of 1.12. The stock has a 50-day moving average of $98.94 and a 200-day moving average of $86.03. The company has a current ratio of 4.06, a quick ratio of 3.46 and a debt-to-equity ratio of 0.05.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its earnings results on Monday, February 23rd. The aerospace company reported $0.18 earnings per share for the quarter, topping the consensus estimate of $0.14 by $0.04. Kratos Defense & Security Solutions had a return on equity of 3.34% and a net margin of 1.63%.The firm had revenue of $345.10 million for the quarter, compared to analyst estimates of $327.51 million. During the same period last year, the company earned $0.13 earnings per share. The firm's revenue for the quarter was up 21.9% on a year-over-year basis. As a group, sell-side analysts forecast that Kratos Defense & Security Solutions, Inc. will post 0.31 EPS for the current fiscal year.

Insider Activity

In other Kratos Defense & Security Solutions news, insider Thomas E. Iv Mills sold 8,523 shares of the company's stock in a transaction dated Wednesday, January 7th. The shares were sold at an average price of $92.98, for a total value of $792,468.54. Following the completion of the transaction, the insider owned 9,802 shares in the company, valued at approximately $911,389.96. This represents a 46.51% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, insider David M. Carter sold 8,123 shares of the firm's stock in a transaction that occurred on Thursday, January 8th. The shares were sold at an average price of $105.40, for a total transaction of $856,164.20. Following the completion of the sale, the insider owned 81,816 shares in the company, valued at $8,623,406.40. The trade was a 9.03% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders sold a total of 574,731 shares of company stock worth $50,506,306 over the last three months. Insiders own 2.37% of the company's stock.

Institutional Trading of Kratos Defense & Security Solutions

Several hedge funds have recently added to or reduced their stakes in KTOS. Corient Private Wealth LLC grew its stake in shares of Kratos Defense & Security Solutions by 19.7% in the fourth quarter. Corient Private Wealth LLC now owns 24,452 shares of the aerospace company's stock worth $1,856,000 after purchasing an additional 4,026 shares in the last quarter. Caitong International Asset Management Co. Ltd bought a new stake in shares of Kratos Defense & Security Solutions during the fourth quarter valued at about $174,000. Oak Grove Capital LLC lifted its holdings in Kratos Defense & Security Solutions by 7.9% in the fourth quarter. Oak Grove Capital LLC now owns 6,800 shares of the aerospace company's stock worth $516,000 after purchasing an additional 500 shares during the period. Pacer Advisors Inc. lifted its holdings in Kratos Defense & Security Solutions by 34.9% in the fourth quarter. Pacer Advisors Inc. now owns 30,327 shares of the aerospace company's stock worth $2,302,000 after purchasing an additional 7,847 shares during the period. Finally, Mcguire Capital Advisors Inc. bought a new position in Kratos Defense & Security Solutions in the 4th quarter valued at about $25,000. 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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