Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading Down 7.4% – Time to Sell?

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s stock price dropped 7.4% during mid-day trading on Tuesday . The stock traded as low as $75.52 and last traded at $77.49. Approximately 4,497,880 shares changed hands during trading, an increase of 2% from the average daily volume of 4,395,790 shares. The stock had previously closed at $83.69.

More Kratos Defense & Security Solutions News

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

• Positive Sentiment: Won a strategic commercial contract to develop and validate a 5G Non-Terrestrial Network (NTN) ground system with SKY Perfect JSAT, expanding Kratos’s addressable market in satellite 5G connectivity beyond defense customers. Kratos Selected by SKY Perfect JSAT as Strategic Partner for 5G NTN Satellite Ground System
• Positive Sentiment: Last reported quarter beat expectations: EPS and revenue topped estimates and revenue grew ~22% year-over-year — results that support mid/long-term revenue momentum. (Earnings release from Feb 23)
• Neutral Sentiment: Recent analyst comparison pieces discuss Kratos versus Elbit (ESLT) in the unmanned/defense tech space; useful for investor context but not a direct catalyst. KTOS vs. ESLT: Which Defense Tech Stock Is a Better Buy Today?
• Neutral Sentiment: Street note / estimate coverage (Noble Financial) on upcoming Q2 estimates may influence short-term expectations if revisions occur. What is Noble Financial’s Estimate for KTOS Q2 Earnings?
• Negative Sentiment: Short interest rose sharply in March to ~9.13M shares (up ~18.4% from late Feb), representing about 5% of the float and a ~1.6 days-to-cover — increased shorting can pressure the stock and amplify downside on weak signals or technical selling.
• Negative Sentiment: Commentary from The Motley Fool highlights valuation concerns (very high P/E multiples reported by some outlets), arguing recent contract/newsflow hasn’t fully justified current valuation — this narrative likely weighed on sentiment. Why Did Kratos Defense Stock Drop Today?

Analyst Ratings Changes

Several equities research analysts recently weighed in on KTOS shares. BTIG Research increased their target price on shares of Kratos Defense & Security Solutions from $95.00 to $115.00 and gave the company a “buy” rating in a research note on Tuesday, February 24th. B. Riley Financial upped their price target on Kratos Defense & Security Solutions from $105.00 to $128.00 and gave the company a “buy” rating in a report on Friday, January 9th. Noble Financial reissued an “outperform” rating on shares of Kratos Defense & Security Solutions in a report on Tuesday, January 20th. Truist Financial set a $135.00 price objective on Kratos Defense & Security Solutions in a report on Friday, January 9th. Finally, Stifel Nicolaus boosted their price objective on Kratos Defense & Security Solutions from $112.00 to $134.00 and gave the company a “buy” rating in a research report on Tuesday, January 13th. One research analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating and six have assigned a Hold rating to the company. According to MarketBeat, Kratos Defense & Security Solutions has an average rating of “Moderate Buy” and an average target price of $98.28.

Kratos Defense & Security Solutions Stock Performance

The firm has a market cap of $14.47 billion, a P/E ratio of 596.12 and a beta of 1.12. The stock’s 50 day moving average is $98.80 and its two-hundred day moving average is $87.85. The company has a debt-to-equity ratio of 0.05, a current ratio of 4.06 and a quick ratio of 3.46.

Kratos Defense & Security Solutions (NASDAQ:KTOS) last announced its quarterly earnings results on Monday, February 23rd. The aerospace company reported $0.18 EPS for the quarter, topping analysts’ consensus estimates of $0.14 by $0.04. The firm 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 1.63% and a return on equity of 3.34%. The company’s revenue for the quarter was up 21.9% compared to the same quarter last year. During the same quarter last year, the company earned $0.13 earnings per share. As a group, equities analysts predict that Kratos Defense & Security Solutions, Inc. will post 0.31 EPS for the current year.

Insider Buying and Selling at Kratos Defense & Security Solutions

In related news, insider Thomas E. Iv Mills sold 8,523 shares of the business’s stock in a transaction on Wednesday, January 7th. The stock was sold at an average price of $92.98, for a total value of $792,468.54. Following the sale, the insider owned 9,802 shares of the company’s stock, valued at $911,389.96. The trade was a 46.51% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, insider Stacey G. Rock sold 16,568 shares of the company’s stock in a transaction on Monday, January 12th. The shares were sold at an average price of $116.74, for a total value of $1,934,148.32. Following the completion of the sale, the insider owned 26,487 shares in the company, valued at $3,092,092.38. This trade represents a 38.48% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Insiders have sold 371,500 shares of company stock worth $34,664,848 over the last three months. 2.37% of the stock is currently owned by insiders.

Hedge Funds Weigh In On Kratos Defense & Security Solutions

Institutional investors have recently added to or reduced their stakes in the company. Geode Capital Management LLC grew its stake in Kratos Defense & Security Solutions by 3.5% during the fourth quarter. Geode Capital Management LLC now owns 4,446,230 shares of the aerospace company’s stock worth $337,565,000 after buying an additional 148,622 shares during the last quarter. Morgan Stanley raised its stake in shares of Kratos Defense & Security Solutions by 3.9% in the fourth quarter. Morgan Stanley now owns 3,311,095 shares of the aerospace company’s stock valued at $251,345,000 after acquiring an additional 124,607 shares during the last quarter. First Trust Advisors LP boosted its holdings in shares of Kratos Defense & Security Solutions by 29.5% in the 3rd quarter. First Trust Advisors LP now owns 3,068,863 shares of the aerospace company’s stock worth $280,402,000 after acquiring an additional 698,778 shares in the last quarter. Invesco Ltd. grew its position in Kratos Defense & Security Solutions by 7.4% during the 3rd quarter. Invesco Ltd. now owns 3,046,194 shares of the aerospace company’s stock worth $278,331,000 after acquiring an additional 209,189 shares during the last quarter. Finally, Hood River Capital Management LLC grew its position in Kratos Defense & Security Solutions by 13.3% during the 2nd quarter. Hood River Capital Management LLC now owns 2,755,446 shares of the aerospace company’s stock worth $127,990,000 after acquiring an additional 324,140 shares during the last quarter. 75.92% of the stock is owned by institutional investors.

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.