Kratos Defense (0JS0) AI Stock Analysis

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Kratos Defense

(LSE:0JS0)

Rating:―N/A

Action:N/A

Date:―

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Positive Factors

Revenue visibilityRecord bookings, a book-to-bill ratio above one, and a $2.6 billion backlog provide meaningful revenue visibility beyond the current quarter. This supports continued production growth, strengthens planning confidence, and indicates that demand extends across multiple defense and national-security programs.

Negative Factors

Weak cash conversionNegative operating and free cash flow show that reported earnings are not yet converting into internally generated liquidity. Continued investment and working-capital needs could restrict financial flexibility, increase reliance on available funding, and delay the benefits of the company's expected production ramp.

Kratos Defense (0JS0) vs. iShares MSCI United Kingdom ETF (EWC)

Market Cap: $6.91B
Dividend Yield: ―
Average Volume (3M): 23.05K
Price to Earnings (P/E): 303.7
Beta (1Y): 1.56
Revenue Growth: 28.17%
EPS Growth: -0.16%
Country: UK
Employees: 4,300
Sector: Industrials
Sector Strength: 63
Industry: Aerospace & Defense

Kratos Defense Business Overview & Revenue Model

Company Description

Kratos Defense & Security Solutions, Inc. primarily functions as a contractor for the United States Department of Defense. Its business operations are organized into two distinct divisions: Kratos Government Solutions and Unmanned Systems. The Kratos...

Kratos Defense Earnings Call Summary

Earnings Call Date:Nov 05, 2026(Q3-2026)|% Change Since:11.52%|Next Earnings Date:Feb 25, 2027

Earnings Call SentimentPositive

The call was strongly positive. Highlights significantly outweighed the lowlights, supported by 35.7% consolidated revenue growth, 23.2% organic growth, record $1.04 billion bookings, a 2.2:1 book-to-bill ratio, record $2.6 billion backlog, an adjusted EBITDA beat, strong program wins, and an 18%-22% initial 2027 revenue-growth outlook. The principal challenges were funding and political uncertainty, supply-chain and labor constraints, negative near-term cash flow, higher working-capital needs, foreign-exchange pressure, and a cost-plus mix that limits margin expansion.

Positive Updates

Strong Third-Quarter Revenue Growth

Third-quarter revenue was $471.8 million, with consolidated revenue growth of 35.7% and organic revenue growth of 23.2%, slightly above the midpoint of the estimated 19.5%-25.5% organic growth range.

Negative Updates

Continuing Resolution and Political Uncertainty

Management cited the continuing resolution, lame-duck Congress, new Congress, divided government party leadership, and uncertainty around appropriations as reasons for taking a cautious approach to initial 2027 guidance.

Company Guidance

Fourth quarter 2026 revenue guidance is $480 million-$510 million, reflecting estimated organic revenue growth of approximately 18%-26% as compared to the fourth quarter of 2025; tightened full year 2026 revenue guidance is $1.78 billion-$1.810 billion. Initial 2027 guidance is revenue of $2.1 billion-$2.2 billion and adjusted EBITDA of $230 million-$240 million, reflecting revenue growth of approximately 18%-22% over the current increased 2026 financial revenue guidance range and estimated organic revenue growth of 18%-22% from the estimated fiscal 2026 revenue range, with Q1 2027 expected to be the lightest revenue and EBITDA fiscal quarter and the third and fourth quarter of fiscal 2027 expected to reflect substantially greater revenue and adjusted EBITDA. Kratos expects approximately $700 million in hypersonic and rocket system revenue in 2027, to produce 3,000 turbojet engines in 2027 and deliver approximately 1,500 in 2027, predominantly in Q3 and Q4, with the remaining 1,500 delivered in 2028, and to place orders for a second production lot of approximately 5,000 more engines; Firejet manufacturing capacity is expected to approximately triple by the end of 2027, and the company currently expects to be cash flow positive by 2029.

Kratos Defense Risk Analysis

Kratos Defense disclosed 67 risk factors in its most recent earnings report. Kratos Defense reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

Kratos Defense Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

GB:0JS0 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LMT	79Outperform	$139.32B	21.58	78.85%	2.26%	7.86%	57.22%
NOC	77Outperform	$77.94B	17.35	25.70%	1.74%	6.51%	14.02%
LHX	75Outperform	$51.38B	25.66	10.17%	1.79%	7.33%	15.31%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RKLB	62Neutral	$39.63B	-182.53	-6.83%	―	59.03%	5.29%
AVAV	51Neutral	$6.28B	-21.37	-6.64%	―	84.44%	-541.91%

* Industrials Sector Average

Performance Comparison

GB:0JS0 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
GB:0JS0	Kratos Defense & Security	36.80	-35.22	-48.90%
AVAV	AeroVironment, Inc.	124.40	-171.09	-57.90%
LHX	L3harris Technologies	276.59	-7.07	-2.49%
LMT	Lockheed Martin	610.05	165.68	37.29%
NOC	Northrop Grumman Corp.	550.96	1.91	0.35%
RKLB	Rocket Lab Usa, Inc.	66.15	20.90	46.19%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Kratos Defense AI Stock Analysis