Kratos Defense & Security Solutions (NASDAQ:KTOS) Stock Falls 12.3% - Time to Sell?

Key Points

• Kratos shares fell 12.3% to $35.96, with trading volume 88% above its average.
• Investor signals were mixed: ARK increased its stake, while Jericho Capital sold all 2.65 million shares it held. Analysts’ ratings were mostly positive overall, with a “Moderate Buy” consensus, though several firms cut price targets.
• Quarterly results were expected on Nov. 5, making earnings a potential catalyst. The company’s previous reported quarter showed revenue growth of 30.5% year over year and earnings above estimates.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s share price dropped 12.3% during trading on Wednesday. The stock traded as low as $35.71 and last traded at $35.96. Approximately 8,207,375 shares changed hands during mid-day trading, an increase of 88% from the average session volume of 4,357,783 shares. The stock had previously closed at $40.99.

More Kratos Defense & Security Solutions News

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

• Positive Sentiment: ARK Invest increased its Kratos stake by 34% in the second quarter, a vote of confidence from Cathie Wood’s firm. Cathie Wood Bought Kratos. A $12 Billion Fund Sold All of It. Who’s Right?
• Positive Sentiment: Despite lowering its price target, KeyBanc reportedly still sees about 83% upside. The article also notes Kratos has raised its revenue outlook twice, offering a potential fundamental counterpoint to the stock’s steep 2026 decline. Kratos Is Down 46% in 2026. KeyBanc Cut Its Target but Still Sees 83% Upside
• Neutral Sentiment: Kratos is expected to report quarterly results on Thursday, Nov. 5. The upcoming report could be an important catalyst, but the article provides no specific earnings expectations. Kratos Defense & Security Solutions Projected to Announce Quarterly Earnings on Thursday
• Negative Sentiment: Jericho Capital Asset Management, described as a $12 billion fund, sold all 2.65 million of its Kratos shares. The sizable exit contrasts with ARK’s buying and may weigh on sentiment. Cathie Wood Bought Kratos. A $12 Billion Fund Sold All of It. Who’s Right?
• Negative Sentiment: KeyCorp issued a pessimistic forecast for KTOS, adding to concerns ahead of earnings; the provided article details do not specify its price target or rationale. KeyCorp Issues Pessimistic Forecast for Kratos Defense & Security Solutions Stock Price

Wall Street Analysts Forecast Growth

KTOS has been the subject of a number of research analyst reports. KeyCorp reduced their target price on Kratos Defense & Security Solutions from $130.00 to $75.00 and set an "overweight" rating for the company in a report on Monday. Guggenheim began coverage on shares of Kratos Defense & Security Solutions in a research note on Monday, September 14th. They set a "buy" rating and a $74.00 price target on the stock. B. Riley Financial cut their price objective on Kratos Defense & Security Solutions from $128.00 to $91.00 and set a "buy" rating for the company in a research note on Friday, October 30th. Piper Sandler cut their price target on Kratos Defense & Security Solutions from $75.00 to $61.00 and set an "overweight" rating for the company in a research note on Friday, October 23rd. Finally, Jefferies Financial Group cut shares of Kratos Defense & Security Solutions from a "buy" rating to a "negative" rating in a research report on Monday, October 19th. Three research analysts have rated the stock with a Strong Buy rating, twenty have given a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat, the company currently has an average rating of "Moderate Buy" and a consensus target price of $83.65.

Kratos Defense & Security Solutions Stock Down 12.3%

The business's 50-day simple moving average is $44.58 and its 200 day simple moving average is $63.96. 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 firm has a market cap of $6.75 billion, a PE ratio of 211.53 and a beta of 1.18.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last issued its quarterly earnings data on Tuesday, August 4th. The aerospace company reported $0.21 EPS for the quarter, beating the consensus estimate of $0.14 by $0.07. Kratos Defense & Security Solutions had a return on equity of 3.07% and a net margin of 2.03%. The firm had revenue of $458.80 million during the quarter, compared to analyst estimates of $410.36 million. During the same quarter in the prior year, the business posted $0.11 EPS. The business's revenue for the quarter was up 30.5% compared to the same quarter last year. As a group, equities research analysts expect that Kratos Defense & Security Solutions, Inc. will post 0.59 earnings per share for the current year.

Insider Buying and Selling

In other Kratos Defense & Security Solutions news, insider Phillip Carrai sold 26,500 shares of the business's stock in a transaction that occurred on Monday, August 17th. The stock was 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 directly owned 182,084 shares in the company, valued at approximately $11,516,813. The trade was a 12.70% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Eric Demarco sold 300,000 shares of the firm's stock in a transaction dated Friday, August 14th. The stock was sold at an average price of $64.33, for a total transaction of $19,299,000.00. Following the completion of the transaction, the chief executive officer directly owned 761,632 shares in the company, valued at approximately $48,995,786.56. This represents a 28.26% 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. Insiders have sold 373,013 shares of company stock valued at $23,340,582 in the last ninety days. Company insiders own 1.50% of the company's stock.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Several large investors have recently modified their holdings of the business. Fulcrum Asset Management LLP boosted its stake in shares of Kratos Defense & Security Solutions by 5,877.9% in the third quarter. Fulcrum Asset Management LLP now owns 10,282 shares of the aerospace company's stock valued at $443,000 after purchasing an additional 10,110 shares during the period. Ethic Inc. increased its stake in Kratos Defense & Security Solutions by 40.1% during the 3rd quarter. Ethic Inc. now owns 10,150 shares of the aerospace company's stock worth $433,000 after buying an additional 2,907 shares during the period. Kornitzer Capital Management Inc. KS lifted its holdings in Kratos Defense & Security Solutions by 146.3% in the 3rd quarter. Kornitzer Capital Management Inc. KS now owns 217,813 shares of the aerospace company's stock worth $9,298,000 after buying an additional 129,364 shares in the last quarter. Kestra Advisory Services LLC lifted its holdings in Kratos Defense & Security Solutions by 19.7% in the 3rd quarter. Kestra Advisory Services LLC now owns 54,688 shares of the aerospace company's stock worth $2,335,000 after buying an additional 8,994 shares in the last quarter. Finally, B&D White Capital Company LLC boosted its position in Kratos Defense & Security Solutions by 21,357.3% in the 3rd quarter. B&D White Capital Company LLC now owns 1,823,870 shares of the aerospace company's stock valued at $77,861,000 after buying an additional 1,815,370 shares during the last quarter. Institutional investors and hedge funds own 75.92% of the company's stock.

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc is a technology and defense contractor that develops systems and products for national security applications. The company supports the U.S. Department of Defense, intelligence agencies, national security-related organizations and selected commercial customers, with an emphasis on affordable, rapidly deployable technologies.

Its offerings include unmanned aerial and target systems, hypersonic and high-speed systems, rocket and propulsion technologies, satellite communications equipment, microwave electronics, radar and missile-defense systems, electronic warfare solutions, command-and-control systems, and virtual and live training products.

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