As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style. The Style Scores are a complementary set of indicators to use alongside the Zacks Rank.
It allows the user to better focus on the stocks that are the best fit for his or her personal trading style. Guidance for FY23 remains unchanged in terms of sales and adjusted EBITDA. However, there’s growing confidence in these projections, with Q3 anticipated to mirror Q2 and Q4 expected to see an uptick due to seasonal strength and profitable OpenSpace software sales. Management is optimistic about sustaining its organic growth, forecasting consecutive annual growth in revenue, EBITDA, and cash flow without major acquisitions in the pipeline.
The company is actively progressing in several areas, promising long-term growth. Their combat drone, Valkyrie, is undergoing significant tests as the Air Force proceeds with its Collaborative Combat Aircraft (CCA) effort. Additionally, management commented on notable advancements in hypersonic (ZEUS) and satellite ground controls (OpenSpace). According to 7 analysts, the average rating for KTOS stock is «Buy.» The 12-month stock price forecast is $15.86, which is an increase of 8.48% from the latest price.
One share of KTOS stock can currently be purchased for approximately $14.71. The company is scheduled to release its next quarterly earnings announcement on Thursday, mt5 indicators November 2nd 2023. Click the link below and we’ll send you MarketBeat’s guide to pot stock investing and which pot companies show the most promise.
Despite being a small-cap company, Kratos trades at a similar forward EBITDA multiple as Heico (HEI), which is almost ten times more enterprise value. The smaller aerospace names trade at a forward EBITDA multiple from 9x-15x, while Kratos trades at nearly 23x. Kratos Defense & Security Solutions’ stock is owned by a variety of retail and institutional investors. Kratos Defense & Security Solutions’ stock was trading at $10.32 at the beginning of the year.
Kratos Defense & Security: Steller Performance Comes At A Price
The KUS segment, established as a standalone segment in 2014, has witnessed minimal profit. This is largely attributed to ongoing investments in fresh unmanned offerings, implying a potential for future revenue growth. The core of KGS is satellite communications, accompanied by capabilities in command and control, signal intelligence, RF identification systems, and electronic warfare. Despite the KUS segment’s growth potential, KGS is Kratos’s primary revenue driver, accounting for 75% of the company’s revenue and nearly 80% of its profit in 2022. 6 equities research analysts have issued 12-month target prices for Kratos Defense & Security Solutions’ stock.
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KTOS Stock – Frequently Asked Questions
From an operational standpoint, Valkyrie achieved a major milestone by completing a simulated three-hour combat mission for the Air Force using the Skyborg AI capability. Concurrently, Kratos’s Rocket Systems ventured into hypersonics by successfully launching a new payload and conducting a static fire test for the Zeus 1 rocket motor. Upcoming tests for the Erinyes and Dark Fury hypersonic vehicles indicate Kratos’s commitment to this domain, expecting it to be a substantial growth catalyst.
There’s also a VGM Score (‘V’ for Value, ‘G’ for Growth and ‘M’ for Momentum), which combines the weighted average of the individual style scores into one score. 69 employees have rated Kratos Defense & Security Solutions Chief Executive Officer Eric M. DeMarco on Glassdoor.com. Eric M. DeMarco has an approval rating of 73% among the company’s employees.
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- Boom-led collaboration brings together world-class companies across design, manufacturing, and maintenance including FTT, GE Additive, and StandardAero GREENSBORO, N.C.
- As an investor, you want to buy stocks with the highest probability of success.
- To see all exchange delays and terms of use please see Barchart’s disclaimer.
However, when assessing Kratos’s stock valuation, much of this forward momentum and anticipated growth is already embedded in its current price. Kratos Defense & Security Solutions issued an update on its third quarter 2023 earnings guidance on Thursday, August, 3rd. The company issued revenue guidance of $240.00 million-$260.00 million, compared to the consensus revenue estimate of $253.03 million. The technique has proven to be very useful for finding positive surprises.
Benzinga’s Top Ratings Upgrades, Downgrades For July 20, 2023
On average, they predict the company’s share price to reach $16.29 in the next twelve months. View analysts price targets for KTOS or view top-rated stocks among Wall Street analysts. In conclusion, Kratos offers an enticing investment opportunity as it aligns with the Department of Defense’s emphasis on cost-effectiveness. The company’s strides in combat drones and satellite communication solidify its standing in the defense sector. However, Kratos is trading at a significant premium to its Aerospace and Defense peers, especially considering its relatively low EBITDA margin. Investors should exercise caution and scrutinize the reasons for Kratos’s elevated valuation, especially considering that its price is trading at a premium.
Translating to more tangible terms, if Kratos were to trade at the peer median multiple of 15.26x, its implied enterprise value would be around $1.53 billion. Accounting for cash and short-term investments of $50 million and deducting total debt of $340 million, we would be left with an implied equity value of approximately $1.24 billion. About 128 million shares are outstanding, resulting in an implied share price of $9.68. This implies a 60% premium compared to its current share price of $15.53. Kratos stock price is up 55% year-to-date as investors anticipate future financial and operational success.
A simple, equally-weighted average return of all Zacks Rank stocks is calculated to determine the monthly return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Kratos Defense & Security reported an impressive Q2 2023, positioning itself favorably to meet its financial goals for the year.
Kratos Defense & Security Solutions, Inc. operates as a technology company that addresses the defense, National Security, and commercial markets. The company develops and fields transformative, affordable systems, products, and solutions. It operates through two segments, Kratos Government Solutions and Unmanned Systems. It also provides unmanned aerial systems, and unmanned ground and seaborne products, as well as related command, control, and communications systems, as well as directed energy products. The company primarily serves national security related agencies, the U.S. Department of Defense, intelligence agencies and classified agencies, international government agencies, and commercial customers.
About Kratos Defense & Security Solutions (NASDAQ:KTOS) Stock
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The consensus among Wall Street research analysts is that investors should «moderate buy» KTOS shares. At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1988 it has more than doubled the S&P 500 with an average gain of +24.32% per year. Zacks Rank stock-rating system returns are computed monthly based on the beginning of the month and end of the month Zacks Rank stock prices plus any dividends received during that particular month.
News Flow
Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California. In the KUS segment, Kratos is an industry leader in manufacturing target drones, essentially used for target practice by fighter jets and missile defense mechanisms. This segment sees a high level of vertical integration, only outsourcing engines and parachutes for its drones.
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Since then, KTOS stock has increased by 42.5% and is now trading at $14.71. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. Contrary to expectations, a defense prime might be able to address the lack of affordable battlefield systems recognized in the 2024 NDAA. An industry with a larger percentage of Zacks Rank #1’s and #2’s will have a better average Zacks Rank than one with a larger percentage of Zacks Rank #4’s and #5’s.
Kratos boasts a 3,600-strong workforce, mainly skewed towards engineering and technical roles. A significant portion of these employees are security-cleared, indicating the sensitivity and importance of their projects. The company’s customer base predominantly revolves around National Security agencies, but its satellite communication vertical also caters to commercial markets. Kratos emphasizes technological innovation and intellectual property, striving to lead and be the first in the market across its core areas of expertise. This forward-thinking approach aligns the organization with future market trends and opportunities. 6 Wall Street research analysts have issued «buy,» «hold,» and «sell» ratings for Kratos Defense & Security Solutions in the last twelve months.