Analysts have raised their price target for Kratos Defense & Security Solutions from approximately $87 to $93 per share. This increase is driven by expectations of continued expansion across unmanned systems, strong performance in major contract wins, and increasing demand trends in both commercial and government aerospace sectors.

Analyst Commentary

Recent research updates on Kratos Defense & Security Solutions reflect a range of perspectives regarding the company’s valuation, business execution, and long-term growth potential. Several bullish analysts have notably increased their price targets, while others are highlighting emerging risks as valuation stretches.

• Bullish analysts have raised their price targets significantly, with some increases exceeding 60 percent. These analysts cite expanding market opportunities and robust contract wins as key drivers.
• The introduction of new, multi-decade franchises in recent months is regarded as expanding Kratos’s opportunity set and creating a foundation for long-term growth.
• Technical achievements such as successful AI-enabled Valkyrie flights with manned Air Force fighters underscore Kratos’s innovation and its role in next-generation defense platforms.
• There is optimism about Kratos’s exposure to critical modernization areas, including unmanned systems, defense, space, advanced engines, and hypersonics. These areas are viewed as drivers for revenue growth and margin expansion well into the decade.

• Bearish analysts caution that the stock’s recent valuation surge may be less connected to underlying free cash flow growth and more reflective of alignment with high-multiple tech peers.
• Concerns persist regarding ongoing government funding uncertainties, such as a looming government shutdown, which could impact future performance and fiscal outlooks.
• While execution on multiple fronts is acknowledged as strong, some note that expectations may be getting ahead of fundamentals, particularly since aftermarket and passenger travel demand drive only part of the company’s revenue.

What's in the News

• President Trump is preparing to adjust U.S. arms control policy, streamlining international sales of advanced military drones and potentially benefiting drone makers such as Kratos (Reuters).
• Raymond James has raised its price target for Kratos Defense to $80, emphasizing the company's strong wins in major new markets and coverage for double-digit growth into 2026 (Raymond James).
• Kratos was selected by Elroy Air as its exclusive U.S. manufacturing partner for the Chaparral VTOL cargo drone, with high-volume production planned for California and Oklahoma facilities.
• Kratos unveiled the “Ragnarok” Low-Cost Cruise Missile system, capable of a 500 nautical mile range and featuring an advanced under-wing configuration for tactical versatility.
• Kratos and GE Aerospace began altitude testing on the new GEK800 small engine, a collaboration to power future unmanned aerial systems and Collaborative Combat Aircraft.

Valuation Changes

• The consensus analyst price target has increased from approximately $87 to $93 per share, reflecting higher expectations for the company's future performance.
• The discount rate has risen slightly, moving from 7.68% to 7.69%.
• Revenue growth projections remain virtually unchanged, holding steady at around 17.36% year-over-year.
• The net profit margin estimate is stable, staying just above 5.2%.
• The future P/E ratio has climbed from 218x to 234x, indicating a further expansion in valuation multiples.