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Upturn AI Summary - About
Kratos Defense & Security Solutions(KTOS)
Advisory History & Simulated Performance *
*as per simulation (see disclosures)- ALL
- 1Y
- 1M
- 1W
- BUY Advisory
- SELL Advisory (Profit)
- SELL Advisory (Loss)
- Profit
- Loss
- PASS (Skip)
Stock price based on last close Advisory Performance History (Simulated)
Upturn Advisory & Investor View for KTOS
10/19/2026: KTOS (3-star) is currently NOT-A-BUY. Pass it for now.
Kratos Defense & Security Solutions is a focused aerospace and defense company primarily serving the US government through its expertise in autonomous drones and satellite communication infrastructure. The company has a leading position in developing affordable, attritable unmanned aerial systems, which serves as its primary growth opportunity. While Kratos benefits from high demand for modern defense technologies, it faces significant risks related to its concentration of government revenue and intense competition from much larger, well-capitalized industry prime contractors. The stock is generally best suited for growth-oriented investors capable of managing the volatility inherent in defense contracting. Investors should monitor progress in mass-production scaling for its key drone programs and commercial adoption of its satellite software.
How to Read the Upturn Advisory
The Upturn Star Rating and the current BUY, SELL, or PASS advisory are generated by Upturn’s AI advisory engine based on proprietary signal analysis, price behavior, advisory history, and historical signal performance.
Company fundamentals, valuation, risks, and news provide supporting context about the business.
Investor Fit
| Investor style | Fit | Why |
|---|---|---|
| Growth investor | Strong fit | Kratos offers exposure to high-growth areas like autonomous drones and space-based software. |
| Momentum investor | Strong fit while signal remains positive | The stock often reacts strongly to new contract awards and defense procurement milestones. |
| Value investor | Weak fit | The company is valued primarily on its future growth potential rather than current cash yield or low P/E multiples. |
| Dividend investor | Weak fit | Kratos does not pay a dividend, making it unsuitable for income-focused portfolios. |
| Low-risk investor | Weak fit | Defense contracting and R&D-heavy companies are subject to significant volatility and government contract risks. |
Risk Profile
| Risk factor | Level | Why it matters |
|---|---|---|
| Price volatility | High | The stock is highly sensitive to defense budget headlines and contract announcements. |
| Valuation risk | Medium / high | As a growth-oriented stock, it often trades at premium multiples, leaving it vulnerable to earnings misses. |
| Competition risk (Defense Primes) | High | Large prime contractors can outspend Kratos on R&D and lobby for competing solutions. |
| Business quality | Medium | The company has improved its operational focus but remains heavily reliant on specific government cycles. |
| Dividend income | Low / none | Investors should not expect any income from this holding. |
| Execution risk | Medium / high | Successfully transitioning from drone prototypes to mass production requires significant operational scale. |
Price Behavior
Steep Decline
The stock price has dropped sharply with strong downward pressure.
Choppy
The stock has experienced frequent reversals and pronounced short-term price swings.
Analysis of Past Performance
Type Stock | Historic Profit 136.37% | Avg. Invested days 51 | Today’s Advisory PASS |
Upturn Advisory Rating  | Upturn Advisory Performance  4.0 | Stock Returns Performance  5.0 |
| Profits based on simulation | Last Close 10/19/2026 |
Upturn Scorecard
Upturn Star Rating 
Company Fundamentals
Financial Health Rating
Growth Momentum Score
Ownership
Top 5 Institutional Investors
Unit Economics (Per $1K Revenue)
Economic Dimensions
Quantitative Style Profile
Style Classification
Quality Focused
Key Highlights
Company Size Mid-Cap Stock | Market Capitalization 7.59B USD | Price to earnings Ratio 237.76 | 1Y Target Price 98.33 |
Price to earnings Ratio 237.76 | 1Y Target Price 98.33 | ||
Volume (30-day avg) 4.5M shares | Beta 1.11 | 52 Weeks Range 37.84 - 134.00 | Updated Date 10/18/2026 |
52 Weeks Range 37.84 - 134.00 | Updated Date 10/18/2026 | ||
Dividends yield (FY) - | Basic EPS (TTM) 0.17 |
How Company Makes Money
| Business area | What it includes | Retail investor read |
|---|---|---|
| Unmanned Aerial Systems | XQ-58A Valkyrie and aerial target drones. | The company makes money by building and selling drones that act as lower-cost targets or 'wingmen' for larger jets. |
| Space & Satellite | OpenSpace software and hardware. | They sell the technology that allows satellite operators to control their networks using software instead of physical equipment. |
| Geography | United States defense contracts. | The vast majority of revenue comes from the US government, making the company reliant on US defense spending. |
Analyzing Revenue: Products, Geography and Growth
Revenue by Products
Product revenue - Year on Year
Revenue by Geography
Geography revenue - Year on Year
Valuation
Trailing PE 237.76 | Forward PE 45.25 | Enterprise Value 7.42B | Price to Sales(TTM) 4.98 |
Enterprise Value 7.42B | Price to Sales(TTM) 4.98 | ||
Enterprise Value to Revenue 4.87 | Enterprise Value to EBITDA 63.98 | Shares Outstanding 187.72M | Shares Floating 185.26M |
Shares Outstanding 187.72M | Shares Floating 185.26M | ||
Percent Insiders 1.29 | Percent Institutions 85.56 |
Financial Metrics
🧭 Investment Snapshot
Total Revenue (Scale)
Total money earned from selling products or services before any costs. It is needed to understand the scale of the business and its ability to generate income.
Net Income (Profit)
Final profit after all expenses, interest, and taxes are deducted. It is needed to determine the overall profitability available to shareholders.
Free Cash Flow (Cash Strength)
Cash remaining after operating activities and capital expenditures, showing cash available for growth. It is needed to evaluate the company’s ability to invest, pay dividends, or reduce debt.
📈 Growth & Strength
Operating Income (Core Profit)
Profit from core operations after deducting all operating expenses. It is needed to measure how efficiently the company runs its primary business activities.
EBITDA (Cash Earnings)
Earnings before interest, taxes, depreciation, and amortization, indicating operating cash potential. It is needed to compare operating performance across companies without accounting or financing differences.
Gross Profit (Unit Profitability)
Revenue minus cost of revenue, showing profit after direct production costs. It is needed to evaluate core business profitability before overhead expenses.
🛡️ Financial Safety
Cash (Liquidity Buffer)
Total cash and cash equivalents on hand. It is needed to evaluate immediate liquidity and financial flexibility.
Total Debt (Leverage Risk)
Total debt including both short-term and long-term components. It is needed to assess the company’s leverage and financial risk.
Net Working Capital (Short-Term Health)
Current assets minus current liabilities, indicating short-term liquidity strength. It is needed to assess whether the company can meet its short-term obligations.
🧱 Balance Sheet Strength
Stockholder Equity (Net Worth)
Total equity value held by shareholders. It is needed to understand the net worth of the company from the owners’ perspective.
Total Assets (Asset Base)
The full value of everything the company owns, including cash, inventory, equipment, and investments. It is needed to understand the resource base used to generate revenue.
Income Before Tax (Pre-Tax Earnings)
Income before provision for income taxes. It is needed to analyze profitability independent of tax structures.
⚙️ Cost & Drag Factors
Cost of Revenue (Production Cost)
Direct costs required to produce and deliver the products or services sold. It is needed to assess efficiency in production and service delivery.
Total Operating Expenses (Operating Cost)
Indirect costs of running the business such as salaries, marketing, and administration. It is needed to understand how much it costs to sustain ongoing business operations.
Income Tax Expense (Tax Drag)
Amount of taxes paid or payable to the government. It is needed to evaluate the impact of taxation on overall profitability.
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