📊 KTOS Key Takeaways
Is Kratos Defense & Security Solutions, Inc.. (KTOS) a Good Investment?
Kratos demonstrates strong top-line growth of 18.5% YoY, but fundamental profitability is deteriorating with net income flat despite revenue expansion, indicating severe margin compression. Most critically, the company generated negative free cash flow of -$137.4M while burning operating cash, which is unsustainable and suggests poor earnings quality despite accounting profits.
Kratos shows strong top-line momentum (+18.5% YoY revenue) and carries a very healthy, debt-free balance sheet with significant liquidity. Profitability remains thin (1.9% operating margin, 1.6% net margin) and cash generation is negative, indicating growth has not yet converted into durable earnings or free cash flow. Maintain a neutral stance pending clear margin expansion and OCF/FCF inflection.
Kratos Defense & Security Solutions, Inc.. Key Strengths (KTOS)
- Revenue growth of 18.5% YoY shows strong market demand in defense sector
- Zero long-term debt with $560.6M cash position provides financial flexibility
- Excellent liquidity with 4.06x current ratio and 3.82x quick ratio demonstrates short-term solvency
- Double-digit revenue growth with improving EPS
- Net cash balance sheet and high liquidity (current ratio 4.06x)
- No long-term debt and sizable cash to support investment
KTOS Stock Risks: Kratos Defense & Security Solutions, Inc.. Investment Risks
- Negative free cash flow of -$137.4M despite positive net income indicates severe cash generation problems and poor earnings quality
- Operating margins compressed to 1.9% and net margins at 1.6%, among the lowest in manufacturing; margin compression persists despite revenue growth
- Net income flat YoY (0.0% growth) while revenue grows 18.5% shows deteriorating profitability and return metrics (ROE 1.1%, ROA 0.9%) are critically weak
- Negative operating and free cash flow (-10.2% FCF margin) despite growth
- Very low profitability and returns (1.9% operating margin, 1.1% ROE)
- Thin earnings cushion (interest coverage 2.7x) heightens execution risk
Key Metrics to Watch
- Operating cash flow and free cash flow trajectory toward positive generation
- Operating margin expansion as company scales revenue
- Return on equity and return on assets improvement from current depressed levels
- Operating margin
- Free cash flow margin
Kratos Defense & Security Solutions, Inc.. (KTOS) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 4.06x current ratio provides a solid financial cushion.
KTOS Profit Margin, ROE & Profitability Analysis
KTOS vs Market Sector: How Kratos Defense & Security Solutions, Inc.. Compares
How Kratos Defense & Security Solutions, Inc.. compares to Market sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Kratos Defense & Security Solutions, Inc.. Stock Overvalued? KTOS Valuation Analysis 2026
Based on fundamental analysis, Kratos Defense & Security Solutions, Inc.. has mixed fundamental signals relative to the Market sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Kratos Defense & Security Solutions, Inc.. Balance Sheet: KTOS Debt, Cash & Liquidity
KTOS Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Kratos Defense & Security Solutions, Inc..'s revenue has grown significantly by 66% over the 5-year period, indicating strong business expansion. The most recent EPS of $-0.07 indicates the company is currently unprofitable.
KTOS Revenue Growth, EPS Growth & YoY Performance
KTOS Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $302.6M | $4.5M | $0.03 |
| Q3 2025 | $275.9M | $3.2M | $0.02 |
| Q2 2025 | $300.1M | $2.9M | $0.02 |
| Q1 2025 | $277.2M | $1.3M | $0.01 |
| Q3 2024 | $274.6M | -$1.6M | $-0.01 |
| Q2 2024 | $256.9M | -$2.7M | $-0.02 |
| Q1 2024 | $231.8M | $1.3M | $0.01 |
| Q3 2023 | $228.6M | -$1.6M | N/A |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Kratos Defense & Security Solutions, Inc.. Dividends, Buybacks & Capital Allocation
KTOS SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Kratos Defense & Security Solutions, Inc.. (CIK: 0001069258)
📋 Recent SEC Filings
❓ Frequently Asked Questions about KTOS
What is the AI rating for KTOS?
Kratos Defense & Security Solutions, Inc.. (KTOS) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are KTOS's key strengths?
Claude: Revenue growth of 18.5% YoY shows strong market demand in defense sector. Zero long-term debt with $560.6M cash position provides financial flexibility. ChatGPT: Double-digit revenue growth with improving EPS. Net cash balance sheet and high liquidity (current ratio 4.06x).
What are the risks of investing in KTOS?
Claude: Negative free cash flow of -$137.4M despite positive net income indicates severe cash generation problems and poor earnings quality. Operating margins compressed to 1.9% and net margins at 1.6%, among the lowest in manufacturing; margin compression persists despite revenue growth. ChatGPT: Negative operating and free cash flow (-10.2% FCF margin) despite growth. Very low profitability and returns (1.9% operating margin, 1.1% ROE).
What is KTOS's revenue and growth?
Kratos Defense & Security Solutions, Inc.. reported revenue of $1.3B.
Does KTOS pay dividends?
Kratos Defense & Security Solutions, Inc.. does not currently pay dividends.
Where can I find KTOS SEC filings?
Official SEC filings for Kratos Defense & Security Solutions, Inc.. (CIK: 0001069258) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KTOS's EPS?
Kratos Defense & Security Solutions, Inc.. has a diluted EPS of $0.13.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is KTOS's fundamental grade?
Based on our AI fundamental analysis in May 2026, Kratos Defense & Security Solutions, Inc.. has a C grade with 70% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is KTOS stock overvalued or undervalued?
Valuation metrics for KTOS: ROE of 1.1% (sector avg: 15%), net margin of 1.6% (sector avg: 12%). Compare these metrics with sector averages to assess valuation.
What is KTOS's AI grade for 2026?
Our dual AI analysis gives Kratos Defense & Security Solutions, Inc.. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is KTOS's free cash flow?
Kratos Defense & Security Solutions, Inc..'s operating cash flow is $-42.1M, with capital expenditures of $95.3M. FCF margin is -10.2%.
How does KTOS compare to other Market stocks?
Vs Default sector averages: Net margin 1.6% (avg: 12%), ROE 1.1% (avg: 15%), current ratio 4.06 (avg: 1.8).