Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Gap Up Following Earnings Beat

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s share price gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $51.87, but opened at $58.87. Kratos Defense & Security Solutions shares last traded at $57.32, with a volume of 2,819,782 shares traded.

The aerospace company reported $0.21 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.14 by $0.07. Kratos Defense & Security Solutions had a return on equity of 2.82% and a net margin of 2.08%.The business had revenue of $458.80 million for the quarter, compared to the consensus estimate of $410.36 million. During the same quarter in the prior year, the business posted $0.11 earnings per share. The firm’s quarterly revenue was up 30.5% compared to the same quarter last year.

Kratos Defense & Security Solutions News Roundup

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

• Positive Sentiment: Q2 results exceeded expectations. Kratos reported revenue of $458.8 million, up 30.5% year over year and well above the $410.4 million consensus estimate. Adjusted EPS of $0.21 also beat expectations of approximately $0.13-$0.14 and rose from $0.11 a year earlier. Kratos Reports Second Quarter 2026 Financial Results
• Positive Sentiment: Growth was broad-based, led by government programs. Kratos Government Solutions revenue increased 36.4% to $379.7 million, while Unmanned Systems revenue rose 8.1% to $79.1 million. Overall organic growth was 19.1%. Kratos forecasts 2026 organic growth
• Positive Sentiment: Management raised confidence in the outlook. Full-year 2026 revenue guidance of $1.8 billion-$1.85 billion was above the roughly $1.7 billion analyst estimate, and the company forecast 19%-23% organic revenue growth. Kratos also expects third-quarter revenue of $460 million-$480 million and is targeting production of 3,000 Spartan engines in 2027. Kratos Reports Second Quarter 2026 Financial Results
• Positive Sentiment: BTIG Research raised its price target to $104 from $100 and maintained a “buy” rating, signaling substantial expected upside from recent trading levels.
• Neutral Sentiment: Despite the earnings momentum, KTOS trades at a very high price-to-earnings ratio of about 305, leaving the stock sensitive to any slowdown in growth, margin pressure, or delays in defense programs.
• Negative Sentiment: Cantor Fitzgerald reduced its price target to $100 from $115, although it retained an “overweight” rating. The midpoint of Kratos’ third-quarter revenue guidance is also modestly below the $462.8 million consensus estimate, which could temper enthusiasm.

Analysts Set New Price Targets

A number of equities research analysts have issued reports on KTOS shares. The Goldman Sachs Group reduced their price objective on shares of Kratos Defense & Security Solutions from $100.00 to $89.00 and set a “buy” rating on the stock in a research note on Tuesday, July 14th. Truist Financial upgraded shares of Kratos Defense & Security Solutions to a “strong-buy” rating in a research report on Friday, May 1st. Cantor Fitzgerald lowered their price objective on shares of Kratos Defense & Security Solutions from $115.00 to $100.00 and set an “overweight” rating for the company in a research report on Tuesday. Jefferies Financial Group set a $105.00 target price on Kratos Defense & Security Solutions in a research note on Wednesday. Finally, BNP Paribas Exane lifted their price target on Kratos Defense & Security Solutions from $80.00 to $85.00 and gave the company a “neutral” rating in a research note on Thursday, May 7th. Three research analysts have rated the stock with a Strong Buy rating, seventeen have given a Buy rating and three have issued a Hold rating to the stock. Based on data from MarketBeat.com, Kratos Defense & Security Solutions currently has a consensus rating of “Buy” and an average price target of $102.12.

Insider Buying and Selling

In other Kratos Defense & Security Solutions news, insider Phillip D. Carrai sold 6,500 shares of the company’s stock in a transaction that occurred on Friday, May 15th. The shares were sold at an average price of $52.13, for a total value of $338,845.00. Following the completion of the transaction, the insider directly owned 221,550 shares in the company, valued at approximately $11,549,401.50. This represents a 2.85% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Stacey G. Rock sold 4,675 shares of the firm’s stock in a transaction on Tuesday, June 30th. The shares were sold at an average price of $50.00, for a total transaction of $233,750.00. Following the transaction, the insider directly owned 9,600 shares of the company’s stock, valued at $480,000. The trade was a 32.75% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 139,036 shares of company stock valued at $7,799,667 over the last three months. Insiders own 1.50% of the company’s stock.

Institutional Inflows and Outflows

Large investors have recently bought and sold shares of the stock. Harbor Investment Advisory LLC bought a new stake in shares of Kratos Defense & Security Solutions in the 2nd quarter valued at about $25,000. Mcguire Capital Advisors Inc. bought a new position in shares of Kratos Defense & Security Solutions during the fourth quarter worth about $25,000. Atlantic Union Bankshares Corp lifted its stake in shares of Kratos Defense & Security Solutions by 7,600.0% in the fourth quarter. Atlantic Union Bankshares Corp now owns 385 shares of the aerospace company’s stock worth $29,000 after acquiring an additional 380 shares during the period. Vision Retirement LLC lifted its stake in shares of Kratos Defense & Security Solutions by 288.2% in the first quarter. Vision Retirement LLC now owns 427 shares of the aerospace company’s stock worth $30,000 after acquiring an additional 317 shares during the period. Finally, Rakuten Securities Inc. bought a new stake in Kratos Defense & Security Solutions in the second quarter valued at approximately $31,000. 75.92% of the stock is owned by institutional investors.

Kratos Defense & Security Solutions Price Performance

The firm has a market capitalization of $10.60 billion, a P/E ratio of 332.41 and a beta of 1.08. The company has a fifty day moving average of $52.54 and a 200 day moving average of $71.64. The company has a debt-to-equity ratio of 0.04, a current ratio of 5.63 and a quick ratio of 5.08.

About Kratos Defense & Security Solutions

Kratos Defense & Security Solutions, Inc (NASDAQ: KTOS) is a technology-driven company that specializes in national security and defense solutions for government and military customers. The firm’s core capabilities span unmanned systems, satellite communications, missile defense, cyber security, and directed-energy weapons. Through its integrated approach, Kratos delivers mission-critical products and services designed to enhance operational readiness and support force modernization initiatives.

In the unmanned systems arena, Kratos develops high-performance aerial platforms used as target drones, low-cost attritable aircraft and experimental stealth demonstrators.