Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading Down 3.1% - Here's Why

Key Points

• KTOS shares fell 3.1% to about $52 during Friday’s trading, with volume below its average; the stock remains well below its 200-day moving average of $65.44.
• Despite the decline, Kratos reported strong quarterly results, with EPS of $0.21 beating estimates by $0.07 and revenue rising 30.5% year over year to $458.8 million.
• Analyst sentiment remains broadly positive, with a “Moderate Buy” consensus and a $99.47 average price target, although some insiders have sold shares and Weiss Ratings downgraded the stock to “sell.”

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS - Get Free Report)'s stock price was down 3.1% during mid-day trading on Friday . The stock traded as low as $51.37 and last traded at $52.00. Approximately 1,962,504 shares traded hands during mid-day trading, a decline of 55% from the average session volume of 4,384,739 shares. The stock had previously closed at $53.69.

Analyst Upgrades and Downgrades

Several brokerages have recently issued reports on KTOS. UBS Group reissued a "neutral" rating and issued a $82.00 price target on shares of Kratos Defense & Security Solutions in a report on Thursday, May 7th. BTIG Research lifted their price objective on shares of Kratos Defense & Security Solutions from $100.00 to $104.00 and gave the company a "buy" rating in a report on Wednesday, August 5th. Canaccord Genuity Group upped their target price on Kratos Defense & Security Solutions from $130.00 to $135.00 and gave the stock a "buy" rating in a report on Wednesday, August 5th. Citizens Jmp cut their price target on shares of Kratos Defense & Security Solutions from $125.00 to $105.00 and set a "market outperform" rating for the company in a research note on Friday, May 8th. Finally, Weiss Ratings lowered Kratos Defense & Security Solutions from a "hold (c)" rating to a "sell (d+)" rating in a report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have issued a Buy rating, two have issued a Hold rating and one has assigned a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Moderate Buy" and a consensus price target of $99.47.

Kratos Defense & Security Solutions Trading Down 3.1%

The company has a market capitalization of $9.76 billion, a price-to-earnings ratio of 305.88 and a beta of 1.08. The company has a debt-to-equity ratio of 0.04, a current ratio of 5.54 and a quick ratio of 4.99. The business's 50-day moving average price is $52.53 and its two-hundred day moving average price is $65.44.

Kratos Defense & Security Solutions (NASDAQ:KTOS - Get Free Report) last released its earnings results on Tuesday, August 4th. The aerospace company reported $0.21 earnings per share (EPS) for the quarter, topping 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 company had revenue of $458.80 million for the quarter, compared to analyst estimates of $410.36 million. During the same period in the prior year, the firm posted $0.11 EPS. Kratos Defense & Security Solutions's quarterly revenue was up 30.5% on a year-over-year basis. Research analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.57 earnings per share for the current year.

Insider Transactions at Kratos Defense & Security Solutions

In related news, insider Steven S. Fendley sold 7,000 shares of Kratos Defense & Security Solutions stock in a transaction that occurred on Monday, August 24th. The shares were sold at an average price of $56.16, for a total transaction of $393,120.00. Following the sale, 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 position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Phillip D. Carrai sold 26,500 shares of the company's stock in a transaction 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 transaction, the insider owned 182,084 shares of the company's stock, valued at $11,516,813. This trade represents a 12.70% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 433,688 shares of company stock worth $26,990,882. 1.50% of the stock is owned by insiders.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently made changes to their positions in KTOS. California State Teachers Retirement System increased its position in Kratos Defense & Security Solutions by 5,429.2% in the 2nd quarter. California State Teachers Retirement System now owns 10,840,811 shares of the aerospace company's stock valued at $540,523,000 after acquiring an additional 10,644,746 shares during the period. Corient Private Wealth LLC lifted its stake in shares of Kratos Defense & Security Solutions by 7,701.6% in the 4th quarter. Corient Private Wealth LLC now owns 1,593,549 shares of the aerospace company's stock valued at $120,966,000 after purchasing an additional 1,573,123 shares during the period. Norges Bank acquired a new position in Kratos Defense & Security Solutions in the fourth quarter valued at approximately $104,807,000. Bank of New York Mellon Corp bought a new position in Kratos Defense & Security Solutions during the second quarter worth $65,293,000. Finally, Bamco Inc. NY acquired a new position in shares of Kratos Defense & Security Solutions during the second quarter valued at about $53,746,000. Institutional investors and hedge funds 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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