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KRATOS DEFENSE & SECURITY (KTOS) Stock Fundamental Analysis

NASDAQ:KTOS - Nasdaq - US50077B2079 - Common Stock - Currency: USD

36.29  +1.36 (+3.89%)

After market: 36.4275 +0.14 (+0.38%)

Fundamental Rating

4

KTOS gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. The financial health of KTOS is average, but there are quite some concerns on its profitability. KTOS shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

KTOS had positive earnings in the past year.
KTOS had a positive operating cash flow in the past year.
In multiple years KTOS reported negative net income over the last 5 years.
Of the past 5 years KTOS 4 years had a positive operating cash flow.
KTOS Yearly Net Income VS EBIT VS OCF VS FCFKTOS Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M -50M 100M 150M 200M

1.2 Ratios

With a Return On Assets value of 0.84%, KTOS is not doing good in the industry: 60.00% of the companies in the same industry are doing better.
KTOS has a Return On Equity (1.20%) which is in line with its industry peers.
KTOS's Return On Invested Capital of 1.57% is on the low side compared to the rest of the industry. KTOS is outperformed by 63.08% of its industry peers.
KTOS had an Average Return On Invested Capital over the past 3 years of 1.26%. This is significantly below the industry average of 7.89%.
The 3 year average ROIC (1.26%) for KTOS is below the current ROIC(1.57%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 0.84%
ROE 1.2%
ROIC 1.57%
ROA(3y)-0.7%
ROA(5y)0.58%
ROE(3y)-1.22%
ROE(5y)0.95%
ROIC(3y)1.26%
ROIC(5y)1.46%
KTOS Yearly ROA, ROE, ROICKTOS Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 -10 -20

1.3 Margins

KTOS has a Profit Margin (1.43%) which is comparable to the rest of the industry.
In the last couple of years the Profit Margin of KTOS has declined.
KTOS has a Operating Margin of 2.90%. This is in the lower half of the industry: KTOS underperforms 63.08% of its industry peers.
KTOS's Operating Margin has declined in the last couple of years.
The Gross Margin of KTOS (25.27%) is comparable to the rest of the industry.
KTOS's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 2.9%
PM (TTM) 1.43%
GM 25.28%
OM growth 3Y-7.51%
OM growth 5Y-12.8%
PM growth 3YN/A
PM growth 5Y-3.81%
GM growth 3Y-3.05%
GM growth 5Y-0.93%
KTOS Yearly Profit, Operating, Gross MarginsKTOS Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 10 -10 20

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6

2. Health

2.1 Basic Checks

KTOS has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, KTOS has more shares outstanding
The number of shares outstanding for KTOS has been increased compared to 5 years ago.
The debt/assets ratio for KTOS has been reduced compared to a year ago.
KTOS Yearly Shares OutstandingKTOS Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 50M 100M 150M
KTOS Yearly Total Debt VS Total AssetsKTOS Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B

2.2 Solvency

KTOS has an Altman-Z score of 5.89. This indicates that KTOS is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 5.89, KTOS is doing good in the industry, outperforming 76.92% of the companies in the same industry.
KTOS has a Debt/Equity ratio of 0.18. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.18, KTOS is in the better half of the industry, outperforming 73.85% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.18
Debt/FCF N/A
Altman-Z 5.89
ROIC/WACC0.16
WACC9.74%
KTOS Yearly LT Debt VS Equity VS FCFKTOS Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 500M 1B

2.3 Liquidity

A Current Ratio of 2.94 indicates that KTOS has no problem at all paying its short term obligations.
KTOS's Current ratio of 2.94 is fine compared to the rest of the industry. KTOS outperforms 67.69% of its industry peers.
KTOS has a Quick Ratio of 2.39. This indicates that KTOS is financially healthy and has no problem in meeting its short term obligations.
The Quick ratio of KTOS (2.39) is better than 81.54% of its industry peers.
Industry RankSector Rank
Current Ratio 2.94
Quick Ratio 2.39
KTOS Yearly Current Assets VS Current LiabilitesKTOS Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M

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8

3. Growth

3.1 Past

KTOS shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.64%, which is quite impressive.
The Earnings Per Share has been growing slightly by 7.58% on average over the past years.
The Revenue has grown by 9.57% in the past year. This is quite good.
KTOS shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 9.63% yearly.
EPS 1Y (TTM)25.64%
EPS 3Y15.26%
EPS 5Y7.58%
EPS Q2Q%8.33%
Revenue 1Y (TTM)9.57%
Revenue growth 3Y11.88%
Revenue growth 5Y9.63%
Sales Q2Q%3.4%

3.2 Future

The Earnings Per Share is expected to grow by 21.56% on average over the next years. This is a very strong growth
Based on estimates for the next years, KTOS will show a quite strong growth in Revenue. The Revenue will grow by 13.16% on average per year.
EPS Next Y6.58%
EPS Next 2Y18.2%
EPS Next 3Y19.39%
EPS Next 5Y21.56%
Revenue Next Year12.37%
Revenue Next 2Y13.33%
Revenue Next 3Y13.35%
Revenue Next 5Y13.16%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
KTOS Yearly Revenue VS EstimatesKTOS Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 500M 1B 1.5B 2B 2.5B
KTOS Yearly EPS VS EstimatesKTOS Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 0 0.5 -0.5 1 1.5

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1

4. Valuation

4.1 Price/Earnings Ratio

KTOS is valuated quite expensively with a Price/Earnings ratio of 74.06.
KTOS's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of KTOS to the average of the S&P500 Index (28.22), we can say KTOS is valued expensively.
KTOS is valuated quite expensively with a Price/Forward Earnings ratio of 69.49.
The rest of the industry has a similar Price/Forward Earnings ratio as KTOS.
KTOS is valuated expensively when we compare the Price/Forward Earnings ratio to 20.86, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 74.06
Fwd PE 69.49
KTOS Price Earnings VS Forward Price EarningsKTOS Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, KTOS is valued a bit more expensive than 64.62% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 71.94
KTOS Per share dataKTOS EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KTOS does not grow enough to justify the current Price/Earnings ratio.
KTOS's earnings are expected to grow with 19.39% in the coming years. This may justify a more expensive valuation.
PEG (NY)11.26
PEG (5Y)9.77
EPS Next 2Y18.2%
EPS Next 3Y19.39%

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0

5. Dividend

5.1 Amount

KTOS does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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KRATOS DEFENSE & SECURITY

NASDAQ:KTOS (5/2/2025, 8:06:15 PM)

After market: 36.4275 +0.14 (+0.38%)

36.29

+1.36 (+3.89%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)02-26 2025-02-26/amc
Earnings (Next)05-07 2025-05-07/amc
Inst Owners89.76%
Inst Owner Change0.25%
Ins Owners1.54%
Ins Owner Change5.7%
Market Cap5.56B
Analysts78.89
Price Target35.7 (-1.63%)
Short Float %6.97%
Short Ratio3.21
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)27.47%
Min EPS beat(2)25.78%
Max EPS beat(2)29.15%
EPS beat(4)4
Avg EPS beat(4)57.3%
Min EPS beat(4)25.78%
Max EPS beat(4)112.58%
EPS beat(8)8
Avg EPS beat(8)46.35%
EPS beat(12)12
Avg EPS beat(12)50.42%
EPS beat(16)15
Avg EPS beat(16)41.52%
Revenue beat(2)0
Avg Revenue beat(2)-2.84%
Min Revenue beat(2)-3.26%
Max Revenue beat(2)-2.42%
Revenue beat(4)2
Avg Revenue beat(4)2.33%
Min Revenue beat(4)-3.26%
Max Revenue beat(4)8.5%
Revenue beat(8)6
Avg Revenue beat(8)3.81%
Revenue beat(12)8
Avg Revenue beat(12)2.69%
Revenue beat(16)10
Avg Revenue beat(16)1.84%
PT rev (1m)7.24%
PT rev (3m)27.06%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-18.07%
EPS NY rev (1m)0%
EPS NY rev (3m)-13.02%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.23%
Revenue NY rev (1m)0.31%
Revenue NY rev (3m)0.15%
Valuation
Industry RankSector Rank
PE 74.06
Fwd PE 69.49
P/S 4.9
P/FCF N/A
P/OCF 111.93
P/B 4.11
P/tB 7.62
EV/EBITDA 71.94
EPS(TTM)0.49
EY1.35%
EPS(NY)0.52
Fwd EY1.44%
FCF(TTM)-0.06
FCFYN/A
OCF(TTM)0.32
OCFY0.89%
SpS7.41
BVpS8.83
TBVpS4.77
PEG (NY)11.26
PEG (5Y)9.77
Profitability
Industry RankSector Rank
ROA 0.84%
ROE 1.2%
ROCE 1.99%
ROIC 1.57%
ROICexc 1.96%
ROICexgc 3.7%
OM 2.9%
PM (TTM) 1.43%
GM 25.28%
FCFM N/A
ROA(3y)-0.7%
ROA(5y)0.58%
ROE(3y)-1.22%
ROE(5y)0.95%
ROIC(3y)1.26%
ROIC(5y)1.46%
ROICexc(3y)1.43%
ROICexc(5y)1.83%
ROICexgc(3y)2.78%
ROICexgc(5y)3.74%
ROCE(3y)1.59%
ROCE(5y)1.85%
ROICexcg growth 3Y-8.73%
ROICexcg growth 5Y-17.52%
ROICexc growth 3Y-5.2%
ROICexc growth 5Y-12.92%
OM growth 3Y-7.51%
OM growth 5Y-12.8%
PM growth 3YN/A
PM growth 5Y-3.81%
GM growth 3Y-3.05%
GM growth 5Y-0.93%
F-Score6
Asset Turnover0.58
Health
Industry RankSector Rank
Debt/Equity 0.18
Debt/FCF N/A
Debt/EBITDA 3.27
Cap/Depr 144.42%
Cap/Sales 5.12%
Interest Coverage 2.25
Cash Conversion 67.9%
Profit Quality N/A
Current Ratio 2.94
Quick Ratio 2.39
Altman-Z 5.89
F-Score6
WACC9.74%
ROIC/WACC0.16
Cap/Depr(3y)150.37%
Cap/Depr(5y)155.59%
Cap/Sales(3y)5.08%
Cap/Sales(5y)5.15%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)25.64%
EPS 3Y15.26%
EPS 5Y7.58%
EPS Q2Q%8.33%
EPS Next Y6.58%
EPS Next 2Y18.2%
EPS Next 3Y19.39%
EPS Next 5Y21.56%
Revenue 1Y (TTM)9.57%
Revenue growth 3Y11.88%
Revenue growth 5Y9.63%
Sales Q2Q%3.4%
Revenue Next Year12.37%
Revenue Next 2Y13.33%
Revenue Next 3Y13.35%
Revenue Next 5Y13.16%
EBIT growth 1Y1.54%
EBIT growth 3Y3.47%
EBIT growth 5Y-4.4%
EBIT Next Year286.89%
EBIT Next 3Y79.86%
EBIT Next 5Y34.18%
FCF growth 1Y-166.41%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-23.77%
OCF growth 3Y17.29%
OCF growth 5Y10.62%