Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Gap Down – What’s Next?

Shares of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) gapped down before the market opened on Tuesday . The stock had previously closed at $94.31, but opened at $88.75. Kratos Defense & Security Solutions shares last traded at $89.13, with a volume of 1,491,788 shares.

Key Stories Impacting Kratos Defense & Security Solutions

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

• Positive Sentiment: Q4 beat — Kratos reported adjusted Q4 EPS of $0.18 and revenue of $345.1M (≈+21.9% YoY), both ahead of Street expectations, showing material revenue and margin improvement. Zacks Article
• Positive Sentiment: Contract wins & product ramps — Kratos highlighted program wins (including a $12.4M USAF award with GE for the GEK1500 engine) and said it’s ramping Valkyrie drone output and hypersonic work — which supports longer-term revenue growth. GlobeNewswire
• Positive Sentiment: Growth runway — Management sees hypersonic revenue ramping (guidance commentary suggested hypersonic revenue could double toward ~$400M in 2026) and backlog growth, supporting multi-year upside if execution continues. MSN
• Neutral Sentiment: Analyst reaction mixed but generally constructive — Some firms raised targets (BTIG raised its price target to $115 and kept a buy), while others remain cautious on valuation. That creates differing near-term sentiment. The Fly
• Negative Sentiment: Weak near-term guidance — Management gave Q1 revenue guidance slightly below consensus, and commentary flagged potential impacts (e.g., federal funding timing), which is the main reason the market punished the stock despite the beat. Barron’s
• Negative Sentiment: Cash flow & insider sales concerns — Q4 showed weaker operating cash flow and higher inventory/capex as Kratos ramps production; multiple reports note heavy insider selling activity, both of which can worry short‑term investors. QuiverQuant
• Negative Sentiment: High valuation risk — The stock already trades at a lofty forward multiple, so any near-term disappointment or slower-than-expected cash conversion tends to produce outsized share moves. Schaeffers Research

Wall Street Analysts Forecast Growth

A number of research firms have recently commented on KTOS. Canaccord Genuity Group set a $125.00 price target on Kratos Defense & Security Solutions in a research report on Tuesday. Jefferies Financial Group restated a “hold” rating and set a $85.00 target price on shares of Kratos Defense & Security Solutions in a report on Thursday, November 6th. UBS Group assumed coverage on shares of Kratos Defense & Security Solutions in a report on Wednesday, February 18th. They issued a “neutral” rating and a $79.00 price target for the company. Truist Financial set a $135.00 price objective on shares of Kratos Defense & Security Solutions in a research report on Friday, January 9th. Finally, Citigroup restated a “market outperform” rating on shares of Kratos Defense & Security Solutions in a report on Tuesday. One equities research analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and six have given a Hold rating to the stock. According to MarketBeat, Kratos Defense & Security Solutions currently has a consensus rating of “Moderate Buy” and an average price target of $95.22.

Kratos Defense & Security Solutions Stock Down 4.0%

The company has a current ratio of 4.30, a quick ratio of 3.68 and a debt-to-equity ratio of 0.04. The company has a market capitalization of $15.42 billion, a P/E ratio of 695.60 and a beta of 1.09. The firm’s 50 day moving average price is $96.78 and its two-hundred day moving average price is $84.65.

Kratos Defense & Security Solutions (NASDAQ:KTOS) last announced its earnings results on Monday, February 23rd. The aerospace company reported $0.18 EPS for the quarter, topping the consensus estimate of $0.14 by $0.04. The business had revenue of $345.10 million during the quarter, compared to analysts’ expectations of $327.51 million. Kratos Defense & Security Solutions had a net margin of 1.56% and a return on equity of 3.14%. The firm’s revenue was up 21.9% on a year-over-year basis. During the same quarter in the prior year, the company posted $0.13 earnings per share. Equities research analysts forecast that Kratos Defense & Security Solutions, Inc. will post 0.31 EPS for the current year.

Insider Activity at Kratos Defense & Security Solutions

In related news, insider Stacey G. Rock sold 16,568 shares of the stock in a transaction that occurred on Monday, January 12th. The stock was sold at an average price of $116.74, for a total transaction of $1,934,148.32. Following the completion of the transaction, the insider directly owned 26,487 shares of the company’s stock, valued at approximately $3,092,092.38. This represents a 38.48% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, Director Scott I. Anderson sold 15,401 shares of the firm’s stock in a transaction that occurred on Monday, December 15th. The shares were sold at an average price of $74.51, for a total value of $1,147,528.51. Following the completion of the transaction, the director owned 66,334 shares of the company’s stock, valued at approximately $4,942,546.34. This represents a 18.84% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 881,907 shares of company stock worth $72,664,183. Corporate insiders own 2.37% of the company’s stock.

Institutional Investors Weigh In On Kratos Defense & Security Solutions

Several large investors have recently made changes to their positions in KTOS. Mcguire Capital Advisors Inc. bought a new position in shares of Kratos Defense & Security Solutions in the fourth quarter valued at $25,000. Atlantic Union Bankshares Corp lifted its stake in 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 valued at $29,000 after acquiring an additional 380 shares during the last quarter. TD Waterhouse Canada Inc. bought a new position in shares of Kratos Defense & Security Solutions in the 2nd quarter valued at about $30,000. Rakuten Securities Inc. acquired a new position in shares of Kratos Defense & Security Solutions during the 2nd quarter worth about $31,000. Finally, Bayforest Capital Ltd acquired a new position in shares of Kratos Defense & Security Solutions during the 3rd quarter worth about $32,000. Institutional investors and hedge funds own 75.92% of the company’s stock.

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.