Kratos Defense and Security Solutions

KTOS · NASDAQ

$38.96−$0.21 (−0.54%)TodayMarket closed · Oct 20, 7:59 PM ET

Prev close $39.17

KTOS analyst rating

BuyConsensus of 20 analysts over the last 12 months. 90% rate it a buy.

Strong buy0
Buy18
Hold2
Underperform0
Sell0

12-month price target · 26 analysts

Average $104.38 (+167.9% upside)

Low: $60.60
Now: $38.96
High: $157.50

Upgrades and downgrades

The latest rating actions, newest first

KTOS analyst upgrades, downgrades and rating actions
Firm	Date	Action	Rating	Price target	Hit rate
Citizens	Oct 19, 2026	Maintains	Market Outperform	$105.00 → $70.00	68%
Macquarie	Oct 16, 2026	Initiates	Outperform	$70.00	0%
Goldman Sachs	Oct 12, 2026	Maintains	Buy	$88.00 → $77.00	56%
Barclays	Oct 9, 2026	Initiates	Overweight	$90.00	26%
Rothschild & Co	Oct 6, 2026	Initiates	Buy	$70.00	—
Jefferies	Oct 1, 2026	Maintains	Buy	$80.00 → $68.00	55%
Guggenheim	Sep 15, 2026	Initiates	Buy	$74.00	71%
Truist Securities	Aug 13, 2026	Maintains	Buy	$135.00 → $104.00	71%
Canaccord Genuity	Aug 6, 2026	Maintains	Buy	$130.00 → $135.00	31%
Stifel	Aug 6, 2026	Maintains	Buy	$134.00 → $115.00	33%

The case for and against

Updated Oct 14, 2026

Bull case

Kratos Defense & Security is well positioned because its portfolio is aligned with the Defense Department’s fastest-growing priorities—unmanned systems, hypersonics, engines, space, and microwave products—while its merchant-supplier model lets it win recurring subsystem content across prime contractors without competing as a full-system OEM. Record backlog and an expanded pipeline support revenue growth above 20% through 2028E, with FY1Q26 revenue of about $371M, up 22.6% year over year, and management expecting hypersonics to rise from roughly $200M in 2025 to $400M in 2026E and $700M in 2027E. Although 2026 includes $125M to $135M of capex and $250M to $275M of total outlays, the spending funds a scalable production base that should drive annual EBITDA margin expansion and stronger free cash flow as volumes ramp.

Bear case

Kratos Defense & Security is viewed negatively because its 2025 revenue remains heavily dependent on U.S. Government agency customers, with roughly 68% of sales concentrated in a budget process vulnerable to continuing resolutions, delayed appropriations, and shifting program timing. Its growth case is also narrowly tied to a few transition-stage programs such as Sentinel and MACH-TB 2.0, where timing is controlled by primes and the DoD, while 69% fixed-price revenue increases exposure to cost overruns, learning-curve misses, and supply chain shortfalls. Heavy capex and working capital needs for new capacity, combined with labor shortages in turbomachinery and scarce SRMs, threaten near-term free-cash-flow conversion and make execution risk too high.

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