Despite a perfect four-quarter earnings beat streak averaging 18% positive surprise and nearly 77% implied upside to the analyst consensus target, business quality falls well short of the minimum threshold — with free cash flow deeply negative relative to net income and no identifiable competitive moat — and a confirmed death cross with price below the 200-day moving average makes this a position to exit, not hold.
Thesis pillars
- Government Revenue Concentration↑Improving
- Quality Below Investment Floor→Stable
- Confirmed Downtrend Death Cross↑Improving
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 23, 2026
Kratos Defense & Security Solut (KTOS) Stock Analysis
Recovery setup
Industrials · Aerospace & Defense
Sell if holding. Engine safety override at $43.59: Quality below floor (2.5 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.6/10 and A.R:R 6.2:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality; Below long-term trend.
Kratos Defense & Security Solutions designs and produces defense technology including jet-powered unmanned aerial drones, hypersonic vehicles, solid rocket motors, microwave electronics, and satellite command and control systems primarily for the U.S. military and intelligence... Read more
Sell if holding. Engine safety override at $43.59: Quality below floor (2.5 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.6/10 and A.R:R 6.2:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 55. Score 5.6/10, moderate confidence.
Passes 5/9 gates (positive momentum, favorable risk/reward ratio, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on earnings proximity 6d<=7d. Suitability: speculative.
Recent developments
updated 2026-10-30Recent Developments — Kratos Defense & Security Solut
Latest news
- NEWS 10 Industrials Stocks Whale Activity In Today’s Session — benzinga Oct 29, 2026 neutral
- NEWS Watching Kartos Defense & Security; Hearing Zacks HR Investor Buys Stock — benzinga Oct 29, 2026 neutral
- NEWS RBC Capital Maintains Outperform on Kratos Defense & Security, Lowers Price Target to $55 — benzinga Oct 28, 2026 positive
- NEWS Kratos Defense Awarded $33.6 Million Contract for NASA's SR-1 Freedom Space Reactor — fiscal.ai Oct 28, 2026 positive
- NEWS RBC Capital Markets Adjusts Price Target for Kratos Defense & Security Solutions — fiscal.ai Oct 28, 2026 neutral
Generated 2026-10-30T11:27:56Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHCustomerU.S. Government68%10-K Item 1A: 'In fiscal 2025, 2024 and 2023, we generated 68%, 67% and 69%, respectively, of our total revenues from contracts with the U.S. Government'
- LOWCustomerU.S. Navy18%10-K Item 1A: 'the U.S. Navy accounted for 17.7% and 14.7%, respectively, of our total revenues'
- LOWCustomerU.S. Air Force13%10-K Item 1A: 'the U.S. Air Force accounted for 12.6% and 15.2% respectively, of our total revenues'
Material Events(8-K, last 90d)
- 2026-03-25Item 5.02LOWOn March 19, 2026, David King was appointed to the Board of Directors and Audit Committee effective March 23, 2026. Mr. Hoglund stepped down from the Audit Committee but remains Chairman of the Board. No reason cited for committee change.SEC filing →
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
2 floor-breakers
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Quality below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Engine safety override at $43.59: Quality below floor (2.5 < 4.0) triggers a hard block regardless of the otherwise-positive setup — overall score 5.6/10 and A.R:R 6.2:1 is above the 1.5:1 BUY gate. Specifically: Below-average business quality; Below long-term trend. Chart setup: Death cross but MACD improving, RSI 55. Prior stop was $40.54. Score 5.6/10, moderate confidence.
Analyst target: $84.10 (+92.9% upside). Prior stop was $40.54. Stop-loss: $40.54.
Concentration risk — Customer: U.S. Government (68.0%); Quality below floor (2.5 < 4.0).
Kratos Defense & Security Solut trades at a P/E of 256.4 (forward 38.5). TrendMatrix value score: 7.0/10. Verdict: Sell.
30 analysts cover KTOS with a consensus score of 4.3/5. Average price target: $93.
What does Kratos Defense & Security Solut do?Kratos Defense & Security Solutions designs and produces defense technology including jet-powered unmanned aerial...
Kratos Defense & Security Solutions designs and produces defense technology including jet-powered unmanned aerial drones, hypersonic vehicles, solid rocket motors, microwave electronics, and satellite command and control systems primarily for the U.S. military and intelligence community. The company operates two segments—Kratos Government Solutions and Unmanned Systems—with 68% of FY2025 revenues from U.S. Government contracts and no single contract exceeding 5% of annual revenue.