📊 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.
Why Buy Kratos Defense & Security Solutions, Inc.. Stock? KTOS Key Strengths
- 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 |
|---|---|---|---|
| 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 |
| Q2 2023 | $224.2M | -$2.7M | $-0.02 |
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 Rating of SELL from Claude (SELL) and ChatGPT (HOLD) 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 rating reflects both perspectives for balanced insights.
Is KTOS a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Kratos Defense & Security Solutions, Inc.. has a SELL rating with 70% confidence. Review the strengths and risks sections above before making a decision. 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.
Should I buy KTOS stock in 2026?
Our dual AI analysis gives Kratos Defense & Security Solutions, Inc.. a combined SELL rating 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).