Kratos Defense & Security Solutions, Inc. Beat Analyst Estimates: See What The Consensus Is Forecasting For Next Year

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) defied analyst predictions to release its third-quarter results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 7.9% to hit US$348m. Kratos Defense & Security Solutions also reported a statutory profit of US$0.05, which was an impressive 50% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the 13 analysts covering Kratos Defense & Security Solutions are now predicting revenues of US$1.59b in 2026. If met, this would reflect a sizeable 24% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 222% to US$0.38. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.56b and earnings per share (EPS) of US$0.37 in 2026. So the consensus seems to have become somewhat more optimistic on Kratos Defense & Security Solutions' earnings potential following these results.

View our latest analysis for Kratos Defense & Security Solutions

The consensus price target rose 7.0% to US$99.57, suggesting that higher earnings estimates flow through to the stock's valuation as well. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kratos Defense & Security Solutions at US$125 per share, while the most bearish prices it at US$80.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Kratos Defense & Security Solutions' growth to accelerate, with the forecast 18% annualised growth to the end of 2026 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Kratos Defense & Security Solutions is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kratos Defense & Security Solutions following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Kratos Defense & Security Solutions. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Kratos Defense & Security Solutions going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.