NasdaqGS:KTOS

Stock Analysis Report

Kratos Defense & Security Solutions

Executive Summary

Kratos Defense & Security Solutions, Inc.

Snowflake

Fundamentals

Reasonable growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

How has Kratos Defense & Security Solutions's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.0%

KTOS

-1.4%

US Aerospace & Defense

1.0%

US Market


1 Year Return

43.7%

KTOS

7.5%

US Aerospace & Defense

8.0%

US Market

Return vs Industry: KTOS exceeded the US Aerospace & Defense industry which returned 7.5% over the past year.

Return vs Market: KTOS exceeded the US Market which returned 8% over the past year.


Shareholder returns

KTOSIndustryMarket
7 Day2.0%-1.4%1.0%
30 Day-5.9%-2.8%-0.07%
90 Day-18.6%1.6%-1.0%
1 Year43.7%43.7%9.6%7.5%10.4%8.0%
3 Year225.4%225.4%59.1%50.3%46.2%36.7%
5 Year186.0%186.0%92.0%73.6%64.3%46.2%

Price Volatility Vs. Market

How volatile is Kratos Defense & Security Solutions's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Kratos Defense & Security Solutions undervalued compared to its fair value and its price relative to the market?

11.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: KTOS ($19.36) is trading below our estimate of fair value ($21.94)

Significantly Below Fair Value: KTOS is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: KTOS is poor value based on its PE Ratio (181x) compared to the Aerospace & Defense industry average (21.6x).

PE vs Market: KTOS is poor value based on its PE Ratio (181x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: KTOS is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: KTOS is overvalued based on its PB Ratio (3.7x) compared to the US Aerospace & Defense industry average (2.5x).


Next Steps

Future Growth

How is Kratos Defense & Security Solutions forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

49.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KTOS's forecast earnings growth (49.5% per year) is above the savings rate (2.7%).

Earnings vs Market: KTOS's earnings (49.5% per year) are forecast to grow faster than the US market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KTOS's revenue (14.6% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: KTOS's revenue (14.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KTOS's Return on Equity is forecast to be low in 3 years time (10.8%).


Next Steps

Past Performance

How has Kratos Defense & Security Solutions performed over the past 5 years?

33.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: KTOS has become profitable over the past 5 years, growing earnings by 33.2% per year.

Accelerating Growth: KTOS has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: KTOS has become profitable in the last year, making it difficult to compare its past year earnings growth to the Aerospace & Defense industry (10.5%).


Return on Equity

High ROE: KTOS's Return on Equity (2%) is considered low.


Return on Assets

ROA vs Industry: KTOS's Return on Assets is below or equal to the Aerospace & Defense industry average last year.


Return on Capital Employed

ROCE Improving: KTOS has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Kratos Defense & Security Solutions's financial position?


Financial Position Analysis

Short Term Liabilities: KTOS's short term assets ($516.0M) exceeds its short term liabilities ($188.9M)

Long Term Liabilities: KTOS's short term assets (516.0M) exceeds its long term liabilities (409.8M)


Debt to Equity History and Analysis

Debt Level: KTOS's debt to equity ratio (51.2%) is considered high

Reducing Debt: KTOS's debt to equity ratio has reduced from 276.8% to 51.2% over the past 5 years.

Debt Coverage: KTOS's debt is not well covered by operating cash flow (11.9%).

Interest Coverage: KTOS's interest payments on its debt are not well covered by EBIT (2x coverage).


Balance Sheet

Inventory Level: KTOS has a low level of unsold assets or inventory.

Debt Coverage by Assets: KTOS's debt is covered by short term assets (assets are 1.751520x debt).


Next Steps

Dividend

What is Kratos Defense & Security Solutions's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage1.9%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate KTOS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate KTOS's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if KTOS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if KTOS's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of KTOS's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Kratos Defense & Security Solutions's salary, the management and board of directors tenure and is there insider trading?

6.2yrs

Average management tenure


CEO

Eric DeMarco (55yo)

15.5yrs

Tenure

US$5,514,184

Compensation

Mr. Eric M. DeMarco has been the Chief Executive Officer of Kratos Defense & Security Solutions, Inc. (alternatively, Wireless Facilities Inc.) since April 1, 2004 and as its President since November 24, 2 ...


CEO Compensation Analysis

Compensation vs. Market: Eric's total compensation ($USD5.51M) is about average for companies of similar size in the US market ($USD4.07M).

Compensation vs Earnings: Eric's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.2yrs

Average Tenure

56yo

Average Age

Experienced Management: KTOS's management team is seasoned and experienced (6.2 years average tenure).


Board Age and Tenure

10.8yrs

Average Tenure

60yo

Average Age

Experienced Board: KTOS's board of directors are seasoned and experienced ( 10.8 years average tenure).


Insider Trading

Insider Buying: KTOS insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$291,45630 Aug 19
David Carter
EntityIndividual
Role
Senior Key Executive
President of Defense & Rocket Support Services Division
Shares14,720
Max PriceUS$19.80
SellUS$123,60209 Aug 19
Thomas Mills
EntityIndividual
Role
Senior Key Executive
President of Modular Systems Division
Shares6,467
Max PriceUS$19.11
SellUS$572,08809 Aug 19
Steven Fendley
EntityIndividual
Shares30,000
Max PriceUS$19.07
SellUS$656,39309 Aug 19
David Carter
EntityIndividual
Role
Senior Key Executive
President of Defense & Rocket Support Services Division
Shares34,327
Max PriceUS$19.12
SellUS$4,813,95009 Aug 19
Oak Investment Partners
EntityCompany
Shares250,000
Max PriceUS$19.26
SellUS$4,778,02509 Aug 19
Bandel Carano
EntityIndividual
Shares250,000
Max PriceUS$19.11
SellUS$1,508,02307 Aug 19
Philip Carrai
EntityIndividual
Role
Chief Technology Officer
President of Technology & Training Solutions Division
Shares77,502
Max PriceUS$19.89
SellUS$313,82107 Aug 19
Maria de Burgreen
EntityIndividual
Role
Chief Accounting Officer
VP & Corporate Controller
Shares16,128
Max PriceUS$19.53
SellUS$279,24907 Aug 19
Marie Mendoza
EntityIndividual
Role
Chief Legal Officer
VP, General Counsel & Secretary
Shares13,993
Max PriceUS$20.12
SellUS$142,79406 Aug 19
Amy Zegart
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares7,305
Max PriceUS$19.55

Ownership Breakdown


Management Team

  • Eric DeMarco (55yo)

    CEO, President & Director

    • Tenure: 15.5yrs
    • Compensation: US$5.51m
  • Tom Mills (59yo)

    President of Modular Systems Division

    • Tenure: 6.2yrs
  • Deanna Lund (51yo)

    Executive VP & CFO

    • Tenure: 15.5yrs
    • Compensation: US$2.53m
  • Phil Carrai (57yo)

    President of Technology & Training Solutions Division

    • Tenure: 9.8yrs
    • Compensation: US$1.88m
  • Jennifer Price

    Senior Vice President of Engineering Services - Madison Research

    • Tenure: 0yrs
  • Dave Carter (61yo)

    President of Defense & Rocket Support Services Division

    • Tenure: 11.8yrs
    • Compensation: US$503.17k
  • Jonah Adelman (68yo)

    President of Microwave Electronics Division

    • Tenure: 4.2yrs
    • Compensation: US$951.70k
  • Marie Mendoza (46yo)

    VP, General Counsel & Secretary

    • Tenure: 3.8yrs
  • Maria de Burgreen (44yo)

    VP & Corporate Controller

    • Tenure: 3.4yrs
  • Kevin Walden

    Chief Information Officer

    • Tenure: 2.8yrs

Board Members

  • Scot Jarvis (59yo)

    Independent Director

    • Tenure: 22.7yrs
    • Compensation: US$192.00k
  • Scott Anderson (60yo)

    Independent Director

    • Tenure: 22.6yrs
    • Compensation: US$186.00k
  • Eric DeMarco (55yo)

    CEO, President & Director

    • Tenure: 15.5yrs
    • Compensation: US$5.51m
  • William Hoglund (65yo)

    Independent Chairman

    • Tenure: 10.3yrs
    • Compensation: US$213.00k
  • Sam Liberatore (82yo)

    Independent Director

    • Tenure: 10.8yrs
    • Compensation: US$171.00k
  • Jane Judd (72yo)

    Independent Director

    • Tenure: 8.8yrs
    • Compensation: US$177.00k
  • Amy Zegart (52yo)

    Independent Director

    • Tenure: 5.1yrs
    • Compensation: US$181.00k

Company Information

Kratos Defense & Security Solutions, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kratos Defense & Security Solutions, Inc.
  • Ticker: KTOS
  • Exchange: NasdaqGS
  • Founded: 1994
  • Industry: Aerospace and Defense
  • Sector: Capital Goods
  • Market Cap: US$2.054b
  • Shares outstanding: 106.10m
  • Website: https://www.kratosdefense.com

Number of Employees


Location

  • Kratos Defense & Security Solutions, Inc.
  • 10680 Treena Street
  • Suite 600
  • San Diego
  • California
  • 92131
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WF5ADB (Deutsche Boerse AG)YesCommon StockDEEURNov 1999
KTOSNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDNov 1999
0JS0LSE (London Stock Exchange)YesCommon StockGBUSDNov 1999

Biography

Kratos Defense & Security Solutions, Inc. provides mission critical products, solutions, and services in the United States. The company operates through two segments, Kratos Government Solutions and Unmann ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 00:04
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.