Kratos Defense & Security Solutions (KTOS) Fair Value & Analysis
Industrials · US · Market cap $9.0B · ISIN US50077B2079
Kratos Defense & Security Solutions
KTOS · US
Structural break: The valuation model sees a lasting decline in earnings power for this stock, the confidence band is broken. Treat the target with caution.
Risks
Fair value as of: Aug 27, 2026
From 16 valuation models · updated 3 days ago
Share price +18.5% over the past month.
Below-average quality, and trading another 2,388% above our fair value.
What runs behind every stock
69 individual criteria per stock, every one traceable See the method →
What matters now
- The price sits above even our optimistic bull case ($2.62). The favourable scenario is already priced in.
- Weak quality (25/100) and above fair value at the same time, the margin of safety is missing on both counts.
Price vs Fair Value (5 years)
White line = price, green steps = our fair value per fiscal year, dashed = 300-day average. As of Aug 27, 2026.
How to read this chart
60‑month range $9.06 – $130.72 · fair‑value band $1.57 – $2.62 · the $52.00 price screens above the $2.09 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). 2 fiscal years are left out: there the valuation rested on only a fraction of the usual models. Dashed = 300-day average. As of Aug 27, 2026.
Analysis
Kratos Defense & Security Solutions (KTOS) currently trades at $52.00, while our model-based Fair Value estimate is $2.09, implying the stock looks roughly 96.0% overvalued today. The Quality Score stands at 25/100 (below-average quality), in the Industrials sector. Bear case: priced above our estimate, the market already discounts strong expectations. Bull case: above-average quality can justify a premium, the entry price still matters most (evidence: high).
Over the trailing twelve months, Kratos Defense & Security Solutions generated revenue of $1.4B at a net margin of 2.1%. Revenue grew 22.6% year over year. It earns a return on equity of 1.2%. The balance sheet holds a net cash position of $381M. Fundamentals as of Aug 27, 2026
Our scenario range runs from $1.57 (bear case) to $2.62 (bull case); at $52.00, the current price sits above that range. Bear and bull are the same models run on conservative and optimistic assumptions (margins, growth, valuation multiples), so a plausible valuation range, not a price target. The last reported earnings sit well below what analysts expect (earnings in transition, for example after write-downs or an earnings dip); whether the stock is cheap or expensive hinges on the expected recovery actually arriving. Read the fair value with that caveat. The share trades about 61% below its 52-week high and 37% above its 52-week low, currently below its 200-day average. For context, the median of 10 Industrials peers we cover trades at -44% fair-value upside, at -96%, KTOS screens richer than that median.
Fair Value models
This estimate rests on fiscal year 2025 figures, and about 8 months have passed since. In that time the company retained roughly 0.11 USD per share, which is 5.4 % of the fair value. The fair value deliberately does not add this in: the models value reported figures, not a projection.
Each model estimates fair value its own way; the Fair Value above is the evidence-weighted blend. Evidence (0–100) measures how completely this model’s inputs are available: well-fed models carry more weight in the blend. The spread across models is intentional, each one stresses a different value driver; dividend models, for instance, come out structurally low when payout is small.
All 16 models by family
Widest divergence: Asset-Based ($7.13) versus Dividend Discount ($0.5100). Highest evidence: Residual Income (76).
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Key figures & financial health
More key figures
Figures from reported company fundamentals · as of Aug 27, 2026. TTM = trailing twelve months.
Quality Score breakdown
Of which business quality 30 · Market factors (momentum, volatility) 14
Non-valuation factor families (profitability, growth, cashflow, financial strength, momentum …), each academically grounded. Valuation itself sits in the Fair Value and is deliberately excluded here to avoid double-counting.
All values are scores from 0 to 100 (100 = best against fixed, research-based bands), not percentages. The three market factors (momentum, 52-week proximity, low volatility) are displayed but carry zero weight in the headline number: market sentiment is not a business property.
About the company
Kratos Defense & Security Solutions, Inc., a technology company, provides technology, hardware, products, system, and software for the defense, national security, and commercial markets in the United States, other North America, the Asia Pacific, the Middle East, Europe, and Internationally.
Full company description
Kratos Defense & Security Solutions, Inc., a technology company, provides technology, hardware, products, system, and software for the defense, national security, and commercial markets in the United States, other North America, the Asia Pacific, the Middle East, Europe, and Internationally. The company operates through Kratos Government Solutions and Unmanned Systems segments. It offers virtualized ground systems for satellites and space vehicles, including software for command and control, telemetry, and tracking and control; jet powered unmanned aerial drone systems and hypersonic vehicles and rocket systems; propulsion systems for drones, missiles, loitering munitions, supersonic systems, spacecraft and launch systems, command, control, communication, computing, combat, and intelligence surveillance and reconnaissance; and microwave electronic products for missile, radar, missile defense, space, and satellite; and counter unmanned aircraft systems, directed energy, communication and other systems, and virtual and augmented reality training systems for the warfighter. The company primarily serves national security-related agencies, the U.S. Department of Defense, intelligence and classified agencies, international government agencies, and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was formerly known as Wireless Facilities, Inc. and changed its name to Kratos Defense & Security Solutions, Inc. in August 1999. Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California.
Company description, as reported by the company or data provider.
Revenue & earnings trend
FY2021 – FY2025 · reported fiscal years
Kratos Defense & Security Solutions reported revenue of $1.3B in FY2025 versus $812M in FY2021, a compound +13.5%/yr. Reported net income was $22.0M in FY2025.
KTOS screens 2,388% overvalued. Compare with General Electric Company →
Earlier news
External third-party headlines (Yahoo Finance, Reuters and others), not an editorial selection.
- Trump’s New Drone Tariffs Give AeroVironment, Kratos and Red Cat a Policy Tailwind
- Unusual Machines Jumps 7%, Ondas Climbs 4%, Kratos Defense Rises 3% as the Drone Trade Snaps Back
- Is Kratos Defense Entering the Scale-Up Phase of Defense Modernization?
- Mercury Systems, BWX, Kratos, Parsons, and Huntington Ingalls Shares Plummet, What You Need To Know
Peer Group
Aerospace & Defense · 233 stocks
How this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.
Valuation Multiples vs Aerospace & Defense median · lower = cheaper
Snowflake
Five quick dimensions, each 0 to 100: VALUE (fair-value potential), FUTURE (revenue growth), PAST (return on equity), HEALTH (low debt), DIVIDEND (yield). Green = this stock, grey = typical sector peer.
VALUE 0: the price sits above our fair-value range.
Insider activity: 40/100
Values & ESG
Does this company touch areas you may want to avoid? The classification is inferred from sector and industry.
Similar stocks
10 more Aerospace & Defense stocks, each showing price versus our Fair Value estimate (as of Aug 27, 2026).
| Stock | Price | Fair Value | vs Fair Value |
|---|---|---|---|
| General Electric Company GE | $354.39 | $116.71 | -67% |
| RTX Corporation RTX | $212.08 | $88.37 | -58% |
| Airbus SE AIR | €213.00 | €117.01 | -45% |
| Lockheed Martin Corporation LMT | $565.89 | $419.01 | -26% |
| Howmet Aerospace Inc HWM | $269.34 | $50.43 | -81% |
| General Dynamics Corporation GD | $379.32 | $274.32 | -28% |
| Northrop Grumman Corporation NOC | $545.57 | $356.59 | -35% |
| TransDigm Group TDG | $1,235 | $571.03 | -54% |
| L3Harris Technologies, Inc LHX | $262.82 | $146.55 | -44% |
| Thales S.A HO | €246.70 | €171.13 | -31% |
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How we calculate Fair Value
Each company is valued through a stack of independent intrinsic-value models (DCF variants, residual-income, multiples and more), blended into one family-balanced consensus and weighted by how much trustworthy data backs it. A separate quality layer scores the fundamentals. Every input is real reported data, nothing guessed.
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