Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) Annual Results: Here's What Analysts Are Forecasting For This Year

Shareholders of Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) will be pleased this week, given that the stock price is up 17% to US$20.70 following its latest annual results. It was a pretty bad result overall; while revenues were in line with expectations at US$1.0b, statutory losses exploded to US$0.07 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Kratos Defense & Security Solutions

Taking into account the latest results, the consensus forecast from Kratos Defense & Security Solutions' nine analysts is for revenues of US$1.14b in 2024. This reflects a decent 9.6% improvement in revenue compared to the last 12 months. Kratos Defense & Security Solutions is also expected to turn profitable, with statutory earnings of US$0.13 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.11b and earnings per share (EPS) of US$0.17 in 2024. While next year's revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

There's been no major changes to the price target of US$20.70, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Kratos Defense & Security Solutions analyst has a price target of US$25.00 per share, while the most pessimistic values it at US$15.00. 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.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 9.6% growth on an annualised basis. That is in line with its 9.3% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 6.5% per year. So it's pretty clear that Kratos Defense & Security Solutions is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kratos Defense & Security Solutions. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$20.70, with the latest estimates not enough to have an impact on their price targets.

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 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Kratos Defense & Security Solutions that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.