Kratos Defense & Security Solutions (NASDAQ:KTOS) Stock Sees Unusually High Call Option Buying

Key Points

• Call option activity surged: Traders purchased 26,657 KTOS call options, 153% above the average volume of 10,519 contracts, signaling unusually high options interest.
• Analysts remain broadly bullish: Kratos has a consensus “Moderate Buy” rating and an average price target of $95.06, despite individual target changes ranging from $68 to $104.
• Shares have weakened while fundamentals improved: KTOS fell to $41.86 and trades well below its 50- and 200-day moving averages, while its latest quarterly revenue rose 30.5% year over year and EPS beat estimates.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) was the recipient of unusually large options trading activity on Wednesday. Traders purchased 26,657 call options on the company. This is an increase of 153% compared to the average volume of 10,519 call options.

Analyst Upgrades and Downgrades

A number of brokerages recently commented on KTOS. BTIG Research lifted their price target on Kratos Defense & Security Solutions from $100.00 to $104.00 and gave the stock a "buy" rating in a report on Wednesday, August 5th. Piper Sandler raised Kratos Defense & Security Solutions from a "neutral" rating to an "overweight" rating and set a $75.00 target price for the company in a research report on Wednesday, August 5th. Rothschild & Co Redburn assumed coverage on Kratos Defense & Security Solutions in a research note on Tuesday. They set a "buy" rating and a $70.00 target price on the stock. Jefferies Financial Group reduced their price target on shares of Kratos Defense & Security Solutions from $80.00 to $68.00 and set a "buy" rating for the company in a research report on Wednesday, September 30th. Finally, Guggenheim started coverage on shares of Kratos Defense & Security Solutions in a report on Monday, September 14th. They set a "buy" rating and a $74.00 price objective for the company. Three research analysts have rated the stock with a Strong Buy rating, seventeen have assigned a Buy rating, two have given a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat, Kratos Defense & Security Solutions currently has a consensus rating of "Moderate Buy" and an average target price of $95.06.

Kratos Defense & Security Solutions Stock Performance

NASDAQ:KTOS traded down $1.85 during trading hours on Wednesday, reaching $41.86. The stock had a trading volume of 3,412,816 shares, compared to its average volume of 4,345,215. The company has a debt-to-equity ratio of 0.04, a quick ratio of 4.99 and a current ratio of 5.54. The stock has a 50 day simple moving average of $50.93 and a 200 day simple moving average of $56.65. Kratos Defense & Security Solutions has a 12-month low of $40.92 and a 12-month high of $134.00. The stock has a market cap of $7.86 billion, a P/E ratio of 246.41 and a beta of 1.11.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its earnings results on Tuesday, August 4th. The aerospace company reported $0.21 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.14 by $0.07. The firm had revenue of $458.80 million for the quarter, compared to analyst estimates of $410.36 million. Kratos Defense & Security Solutions had a return on equity of 3.07% and a net margin of 2.03%.The business's revenue was up 30.5% on a year-over-year basis. During the same period in the previous year, the company posted $0.11 earnings per share. On average, research analysts forecast that Kratos Defense & Security Solutions will post 0.57 EPS for the current fiscal year.

Insider Activity

In other Kratos Defense & Security Solutions news, Director Scot B. Jarvis sold 10,000 shares of the company's stock in a transaction dated Tuesday, August 18th. The shares were sold at an average price of $63.50, for a total value of $635,000.00. Following the completion of the sale, the director directly owned 65,123 shares of the company's stock, valued at approximately $4,135,310.50. This represents a 13.31% decrease in their position. The sale was disclosed in a document filed with the SEC, which is accessible through the SEC website. Also, insider Phillip Carrai sold 26,500 shares of the stock in a transaction dated Monday, August 17th. The shares were sold at an average price of $63.25, for a total transaction of $1,676,125.00. Following the completion of the sale, the insider owned 182,084 shares of the company's stock, valued at approximately $11,516,813. This trade represents a 12.70% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 375,513 shares of company stock worth $23,597,752. Company insiders own 1.50% of the company's stock.

Institutional Trading of Kratos Defense & Security Solutions

Several hedge funds and other institutional investors have recently modified their holdings of the business. Bank of New York Mellon Corp boosted its holdings in Kratos Defense & Security Solutions by 12.2% in the 1st quarter. Bank of New York Mellon Corp now owns 1,515,997 shares of the aerospace company's stock worth $106,893,000 after buying an additional 164,607 shares during the period. Goldman Sachs Group Inc. raised its holdings in Kratos Defense & Security Solutions by 66.0% during the 4th quarter. Goldman Sachs Group Inc. now owns 1,398,525 shares of the aerospace company's stock valued at $106,162,000 after acquiring an additional 556,036 shares during the period. Principal Financial Group Inc. lifted its position in shares of Kratos Defense & Security Solutions by 48.0% during the first quarter. Principal Financial Group Inc. now owns 1,056,872 shares of the aerospace company's stock worth $74,520,000 after acquiring an additional 342,789 shares in the last quarter. Bamco Inc. NY purchased a new stake in shares of Kratos Defense & Security Solutions during the second quarter worth $53,746,000. Finally, American Capital Management Inc. bought a new position in shares of Kratos Defense & Security Solutions in the second quarter worth $51,338,000. Institutional investors own 75.92% of the company's stock.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc is a technology company that develops products and systems for national security, defense, and commercial applications. Its offerings support unmanned systems, satellite communications, space operations, missile defense, hypersonic programs, launch systems, and command, control, communications, computers, intelligence, surveillance, and reconnaissance (C5ISR) missions.

The company provides unmanned aerial, ground, and maritime systems, including target drones and other autonomous platforms used for testing, training, and operational missions.

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