Kratos Defense & Security Solutions (NASDAQ:KTOS) Sets New 1-Year Low - Should You Sell?

Key Points

• Kratos shares fell to a new 52-week low of $40.52, below their 50-day and 200-day moving averages, amid a valuation of roughly 235 times earnings.
• Despite the decline, Wall Street’s consensus remains “Moderate Buy,” with an average price target of $94.16; most analysts maintain Buy or Strong Buy ratings, though one firm rates the stock Sell.
• The company exceeded quarterly expectations, reporting $0.21 in EPS versus $0.14 expected and revenue of $458.8 million, up 30.5% year over year. However, insiders sold approximately $23.6 million of shares over the past 90 days.

Shares of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) hit a new 52-week low during trading on Tuesday. The stock traded as low as $40.52 and last traded at $40.5910, with a volume of 437,260 shares. The stock had previously closed at $41.62.

Wall Street Analyst Weigh In

KTOS has been the subject of several research reports. Wedbush started coverage on shares of Kratos Defense & Security Solutions in a report on Tuesday, June 30th. They issued an "outperform" rating and a $85.00 target price for the company. Piper Sandler raised Kratos Defense & Security Solutions from a "neutral" rating to an "overweight" rating and set a $75.00 target price on the stock in a research report on Wednesday, August 5th. Cantor Fitzgerald decreased their price target on Kratos Defense & Security Solutions from $115.00 to $100.00 and set an "overweight" rating on the stock in a research note on Tuesday, August 4th. Stifel Nicolaus lowered their price target on Kratos Defense & Security Solutions from $134.00 to $115.00 and set a "buy" rating for the company in a research report on Thursday, August 6th. Finally, Weiss Ratings lowered Kratos Defense & Security Solutions from a "hold (c)" rating to a "sell (d+)" rating in a research report on Wednesday, August 5th. Two analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, one has given a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, Kratos Defense & Security Solutions has an average rating of "Moderate Buy" and an average target price of $94.16.

Kratos Defense & Security Solutions Stock Performance

The company has a market capitalization of $7.53 billion, a price-to-earnings ratio of 235.51 and a beta of 1.11. The company has a current ratio of 5.54, a quick ratio of 4.99 and a debt-to-equity ratio of 0.04. The stock's fifty day simple moving average is $50.56 and its 200-day simple moving average is $55.45.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The aerospace company reported $0.21 EPS for the quarter, beating the consensus estimate of $0.14 by $0.07. The company had revenue of $458.80 million during the quarter, compared to analysts' expectations of $410.36 million. Kratos Defense & Security Solutions had a net margin of 2.03% and a return on equity of 3.07%. The firm's revenue was up 30.5% compared to the same quarter last year. During the same quarter last year, the company posted $0.11 EPS. Analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.57 EPS for the current year.

Insiders Place Their Bets

In other news, insider Steven S. Fendley sold 7,000 shares of the business's stock in a transaction dated Monday, August 24th. The stock was sold at an average price of $56.16, for a total transaction of $393,120.00. Following the completion of the transaction, the insider directly owned 288,111 shares of the company's stock, valued at approximately $16,180,313.76. The trade was a 2.37% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Deanna H. Lund sold 7,000 shares of the business's stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $48.78, for a total transaction of $341,460.00. Following the transaction, the chief financial officer owned 273,511 shares of the company's stock, valued at $13,341,866.58. This trade represents a 2.50% 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. In the last ninety days, insiders have sold 375,513 shares of company stock worth $23,597,752. Corporate insiders own 1.50% of the company's stock.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the business. AdvisorNet Financial Inc raised its holdings in Kratos Defense & Security Solutions by 15.8% during the first quarter. AdvisorNet Financial Inc now owns 1,392 shares of the aerospace company's stock worth $98,000 after purchasing an additional 190 shares in the last quarter. Fifth Third Wealth Advisors LLC lifted its position in shares of Kratos Defense & Security Solutions by 3.5% during the 1st quarter. Fifth Third Wealth Advisors LLC now owns 6,035 shares of the aerospace company's stock worth $426,000 after buying an additional 205 shares during the last quarter. Cornell Pochily Investment Advisors Inc. boosted its holdings in shares of Kratos Defense & Security Solutions by 2.6% in the 1st quarter. Cornell Pochily Investment Advisors Inc. now owns 9,936 shares of the aerospace company's stock valued at $701,000 after buying an additional 250 shares in the last quarter. Versant Capital Management Inc boosted its holdings in shares of Kratos Defense & Security Solutions by 61.9% in the 2nd quarter. Versant Capital Management Inc now owns 696 shares of the aerospace company's stock valued at $35,000 after buying an additional 266 shares in the last quarter. Finally, Towarzystwo Funduszy Inwestycyjnych PZU SA boosted its holdings in shares of Kratos Defense & Security Solutions by 6.4% in the 4th quarter. Towarzystwo Funduszy Inwestycyjnych PZU SA now owns 5,000 shares of the aerospace company's stock valued at $380,000 after buying an additional 300 shares in the last quarter. 75.92% of the stock is owned by institutional investors and hedge funds.

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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