Kratos Defense & Security Solutions (NASDAQ:KTOS) Releases Earnings Results, Beats Estimates By $0.04 EPS

Kratos Defense & Security Solutions (NASDAQ:KTOS) announced its quarterly earnings data on Monday. The aerospace company reported $0.18 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.14 by $0.04, FiscalAI reports. Kratos Defense & Security Solutions had a return on equity of 3.44% and a net margin of 1.63%.The firm had revenue of $345.10 million during the quarter, compared to the consensus estimate of $327.51 million. During the same period in the prior year, the business earned $0.13 EPS. The business’s revenue for the quarter was up 21.9% on a year-over-year basis.

Here are the key takeaways from Kratos Defense & Security Solutions’ conference call:

• Kratos beat Q4 expectations with approximately 20% organic revenue growth, a 1.3:1 book-to-bill, a record backlog of $1.573B and a record opportunity pipeline of $13.7B, and management reiterated targets for 2026–2027.
• Management expects a rapid hypersonics ramp — 120 Zeus/Oriole SRMs on order, new hypersonic facilities, a Pentagon Mach‑5+ award, and hypersonic revenue guidance of roughly $400M in 2026 and ~$700M in 2027.
• Turbine/engine business is scaling — Spartan engines expected to enter low‑rate initial production in H2, a new 40,000 engines/year capacity facility is online, and management cited large potential engine volumes (including a ~15,000 engine ROM) that could drive high‑margin EBITDA upside.
• Near‑term cash and margin pressures — Q4 operating cash flow was modest ($12.1M), Days Sales Outstanding rose to 121 days after funding delays, free cash flow was essentially neutral, and 2026 capex is high ($135–145M, incl. ~$50M Prometheus JV funding), which raises short‑term working capital risk.
• Unmanned systems show runway but remain contingent — Valkyrie production goal raised to ~40/year by end of 2028 (from ~8 today) and MUX/TACAIR contributed initial awards, but large production quantities remain un‑definitized and are excluded from base guidance.

Kratos Defense & Security Solutions Trading Down 3.8%

Shares of NASDAQ KTOS opened at $90.68 on Wednesday. Kratos Defense & Security Solutions has a twelve month low of $24.33 and a twelve month high of $134.00. The stock has a market cap of $15.45 billion, a price-to-earnings ratio of 697.59 and a beta of 1.09. The company has a quick ratio of 3.68, a current ratio of 4.30 and a debt-to-equity ratio of 0.04. The company’s fifty day moving average is $97.13 and its 200-day moving average is $84.84.

More Kratos Defense & Security Solutions News

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

• Positive Sentiment: Q4 results beat Street estimates — revenue of $345.1M (+21.9% YoY) and adjusted EPS above consensus; backlog growth and multiple new defense/space contract wins support medium‑term revenue visibility. Kratos Defense Q4 Earnings and Revenues Surpass Estimates
• Positive Sentiment: Programs and addressable markets remain strong — company highlighted hypersonics, Valkyrie drone production ramps and a joint Air Force award with GE, which underpin long‑term growth expectations. Kratos anticipates doubling hypersonic revenue to $400M in 2026
• Neutral Sentiment: Analysts remain bullish overall — several firms reiterated/raised price targets (BTIG, Canaccord) citing program traction; that support tempers downside even as the stock digests guidance. Drone Maker Beats Earnings Views But Falls On This Headwind
• Negative Sentiment: Weaker near‑term guidance drove the immediate pullback — Q1 revenue guidance came in slightly below consensus and management warned of a choppy start to 2026 (federal‑timing/funding and production ramp effects), which prompted the sell‑off despite the beat. Kratos Stock Drops After the Drone Maker’s Earnings Beat Estimates. Here’s Why.
• Negative Sentiment: Cash flow and cadence concerns — operating cash fell and management is building inventory/capacity to support ramps, which increases near‑term cash burn and raises execution risk until production scales. QuiverQuant: KTOS Stock Falls on Q4 2025 Earnings
• Negative Sentiment: Valuation and insider selling amplify risk — the stock trades at very high forward multiples versus peers and recent heavy insider sales are noted by some data providers, which can make investors more sensitive to any soft guide or execution miss. Why Kratos Defense Stock Just Dropped

Wall Street Analyst Weigh In

Several equities research analysts recently weighed in on KTOS shares. BTIG Research boosted their target price on Kratos Defense & Security Solutions from $95.00 to $115.00 and gave the stock a “buy” rating in a report on Tuesday. Jefferies Financial Group restated a “hold” rating and set a $85.00 price target on shares of Kratos Defense & Security Solutions in a research note on Thursday, November 6th. Noble Financial reaffirmed an “outperform” rating on shares of Kratos Defense & Security Solutions in a report on Tuesday, January 20th. Cantor Fitzgerald restated an “overweight” rating and set a $115.00 target price on shares of Kratos Defense & Security Solutions in a report on Tuesday. Finally, UBS Group assumed coverage on Kratos Defense & Security Solutions in a research note on Wednesday, February 18th. They issued a “neutral” rating and a $79.00 target price for the company. One investment analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating and six have issued a Hold rating to the company’s stock. According to MarketBeat.com, Kratos Defense & Security Solutions presently has an average rating of “Moderate Buy” and a consensus target price of $98.28.

Insiders Place Their Bets

In other Kratos Defense & Security Solutions news, SVP Marie Mendoza sold 1,500 shares of the stock in a transaction dated Tuesday, February 17th. The stock was sold at an average price of $88.08, for a total value of $132,120.00. Following the completion of the sale, the senior vice president directly owned 62,121 shares in the company, valued at $5,471,617.68. This represents a 2.36% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Deanna H. Lund sold 5,000 shares of the firm’s stock in a transaction dated Monday, February 2nd. The stock was sold at an average price of $96.87, for a total value of $484,350.00. Following the sale, the chief financial officer directly owned 274,983 shares in the company, valued at approximately $26,637,603.21. This represents a 1.79% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 881,907 shares of company stock worth $72,664,183 over the last 90 days. 2.37% of the stock is currently owned by corporate insiders.

Institutional Trading of Kratos Defense & Security Solutions

A number of large investors have recently bought and sold shares of the business. Morgan Stanley raised its holdings in Kratos Defense & Security Solutions by 3.9% during the 4th quarter. Morgan Stanley now owns 3,311,095 shares of the aerospace company’s stock worth $251,345,000 after buying an additional 124,607 shares during the period. Invesco Ltd. increased its position in shares of Kratos Defense & Security Solutions by 7.4% during the third quarter. Invesco Ltd. now owns 3,046,194 shares of the aerospace company’s stock worth $278,331,000 after acquiring an additional 209,189 shares in the last quarter. Northern Trust Corp raised its holdings in shares of Kratos Defense & Security Solutions by 13.6% during the third quarter. Northern Trust Corp now owns 2,072,700 shares of the aerospace company’s stock worth $189,383,000 after acquiring an additional 247,652 shares during the period. Corient Private Wealth LLC lifted its position in 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 acquiring an additional 1,573,123 shares in the last quarter. Finally, MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. boosted its stake in Kratos Defense & Security Solutions by 59.1% in the 2nd quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 1,094,884 shares of the aerospace company’s stock worth $50,857,000 after purchasing an additional 406,895 shares during the period. 75.92% of the stock is owned by institutional investors.

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.