Driven by a robust contract pipeline, accelerated defense spending, and strong prospects for unmanned platforms and next-generation technologies, analysts have raised their price target for Kratos Defense & Security Solutions from $71.21 to $74.21.

Analyst Commentary

• Bullish analysts highlight Kratos Defense's robust pipeline and new contract wins, positioning the company for significant revenue growth—with projections of $3B-plus in revenues and 13-30% annual revenue growth over the next several years.
• Rising defense budgets, modernization initiatives, and government policy shifts—including deregulation around drone innovation—are expected to accelerate Kratos’ leadership in drones, hypersonics, air defense, engines, and space.
• Recent capital raises ($500M) give Kratos additional financial flexibility and optionality to pursue new program opportunities amidst expanding Department of Defense initiatives and to support aggressive growth targets.
• Analysts see Kratos' next-generation unmanned platforms (notably the X-58 drone) and rapidly scaling microwave electronics and munitions as key growth drivers, with optimism around sustainable margin expansion and premium valuation potential.
• Evolving U.S. force structure priorities, major defense programs (such as Operation Spiderweb), and firming commercial demand for national security solutions are expected to underpin long-term structural demand and reinforce Kratos’ growth trajectory.

What's in the News

• Kratos was selected as Elroy Air's exclusive U.S. manufacturing partner for the Chaparral VTOL cargo drone, securing a five-year strategic agreement to accelerate high-volume UAV production, with initial manufacturing in Sacramento and future expansion in Oklahoma City (Key Developments, 9/23/2025).
• Kratos and GE Aerospace commenced altitude testing of the jointly developed GEK800 small jet engine, advancing technologies for next-generation unmanned aerial systems and collaborative combat aircraft (Key Developments, 9/23/2025).
• Kratos is set to display its advanced unmanned jet drones, including the Valkyrie and Mako models, as well as turbojet engines and Elroy Air’s Chaparral at the Miramar Air Show, underscoring leadership in affordable, mass-producible military UAS and propulsion solutions (Key Developments, 9/25/2025).
• The firm remains well positioned in critical defense modernization areas—such as air defense, hypersonics, drones, and space—reflected by a raised price target of $80 at Raymond James following record Q2 results, a growing $13B pipeline, and projected $3B+ revenue trajectory (Raymond James, 8/8/2025).
• Kratos stands to benefit from Trump administration policies easing U.S. military drone exports, opening new international markets under streamlined Foreign Military Sales procedures, alongside industry peers (Reuters, 9/5/2025).

Valuation Changes

Summary of Valuation Changes for Kratos Defense & Security Solutions

• The Consensus Analyst Price Target has risen slightly from $71.21 to $74.21.
• The Future P/E for Kratos Defense & Security Solutions has risen slightly from 180.12x to 186.79x.
• The Consensus Revenue Growth forecasts for Kratos Defense & Security Solutions has risen slightly from 17.0% per annum to 17.4% per annum.