Kratos Defense & Security Solutions (NASDAQ:KTOS) Stock Price Up 4.5% - Should You Buy?

Key Points

• Kratos shares rose 4.5% to $40.43, but remained below their 50-day and 200-day moving averages of $46.80 and $53.44, respectively.
• Analyst sentiment is broadly positive, with a consensus “Moderate Buy” rating and an $89.50 price target, although individual targets range widely and one firm issued a sell rating.
• The company exceeded quarterly expectations, reporting $0.21 EPS and $458.8 million in revenue, with revenue up 30.5% year over year; however, its high valuation and recent insider selling remain potential risks.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report) traded up 4.5% during trading on Monday. The stock traded as high as $40.56 and last traded at $40.43. 3,470,521 shares changed hands during mid-day trading, a decline of 20% from the average session volume of 4,357,815 shares. The stock had previously closed at $38.68.

Analyst Upgrades and Downgrades

A number of research firms have commented on KTOS. Guggenheim assumed 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 target price on the stock. Weiss Ratings lowered shares of Kratos Defense & Security Solutions from a "hold (c)" rating to a "sell (d+)" rating in a research report on Wednesday, August 5th. Rothschild & Co Redburn started coverage on shares of Kratos Defense & Security Solutions in a research note on Tuesday, October 6th. They issued a "buy" rating and a $70.00 price objective for the company. BNP Paribas Exane upgraded shares of Kratos Defense & Security Solutions from a "neutral" rating to an "outperform" rating in a research report on Thursday, October 8th. Finally, Truist Financial decreased their price objective on shares of Kratos Defense & Security Solutions from $135.00 to $104.00 and set a "buy" rating on the stock in a research report on Thursday, August 13th. Two research analysts have rated the stock with a Strong Buy rating, twenty have assigned a Buy rating, one has assigned a Hold rating and two have assigned a Sell rating to the stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $89.50.

Kratos Defense & Security Solutions Trading Up 4.5%

The stock has a fifty day moving average of $46.80 and a 200 day moving average of $53.44. 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 company has a market capitalization of $7.59 billion, a PE ratio of 237.82 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 for the quarter, topping analysts' consensus estimates of $0.14 by $0.07. Kratos Defense & Security Solutions had a net margin of 2.03% and a return on equity of 3.07%. 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 earned $0.11 earnings per share. Kratos Defense & Security Solutions's revenue for the quarter was up 30.5% on a year-over-year basis. As a group, sell-side analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.59 earnings per share for the current fiscal year.

Insider Buying and Selling at Kratos Defense & Security Solutions

In other news, insider Steven S. Fendley sold 7,000 shares of the stock in a transaction that occurred on 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 in the company, valued at approximately $16,180,313.76. This represents a 2.37% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Scot Jarvis sold 10,000 shares of the stock in a transaction on Tuesday, August 18th. The shares were sold at an average price of $63.50, for a total transaction of $635,000.00. Following the transaction, the director owned 65,123 shares of the company's stock, valued at $4,135,310.50. This trade represents a 13.31% decrease in their position. The SEC filing for this sale provides additional information. Over the last ninety days, insiders sold 375,013 shares of company stock worth $23,526,932. 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 bought and sold shares of KTOS. Paradigm Capital Management Inc. NY purchased a new stake in shares of Kratos Defense & Security Solutions in the second quarter valued at $34,842,000. Bamco Inc. NY bought a new stake in shares of Kratos Defense & Security Solutions in the 2nd quarter worth about $53,746,000. Ausbil Investment Management Ltd lifted its holdings in shares of Kratos Defense & Security Solutions by 623.2% in the 3rd quarter. Ausbil Investment Management Ltd now owns 40,339 shares of the aerospace company's stock worth $1,722,000 after acquiring an additional 34,761 shares during the last quarter. Principal Financial Group Inc. boosted its stake in shares of Kratos Defense & Security Solutions by 48.0% during the 1st quarter. Principal Financial Group Inc. now owns 1,056,872 shares of the aerospace company's stock worth $74,520,000 after purchasing an additional 342,789 shares during the period. Finally, Pinnacle Associates Ltd. boosted its stake in shares of Kratos Defense & Security Solutions by 37.7% during the 3rd quarter. Pinnacle Associates Ltd. now owns 447,302 shares of the aerospace company's stock worth $19,095,000 after purchasing an additional 122,532 shares during the period. Hedge funds and other institutional investors own 75.92% of the company's stock.

About Kratos Defense & Security Solutions

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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