Why Kratos Defense Stock Powered Higher Today

• JonesResearch initiated sum of Kratos banal with a bargain today.

• Kratos is increasing nicely but profits look weak.

• 10 stocks we similar amended than Kratos Defense & Security Solutions ›

Kratos Defense & Security Solutions (NASDAQ: KTOS) banal gained 9.7% done 11:45 a.m. ET, Monday aft JonesResearch expert Josh Sullivan initiated sum of the defence banal with a bargain standing and a $150 terms target.

There's not overmuch item disposable connected the caller rating, different than the information that it happened. Neither TheFly.com nor StreetInsider.com, my 2 go-to sources for ratings news, cognize thing much than the standing and the terms target.

What we bash cognize astir Kratos comes chiefly from the company's Nov. 4 net study connected fiscal Q3 2025 results. In that report, Kratos said income grew 26% twelvemonth implicit year, with 36% maturation successful income of "unmanned systems" -- i.e., drones. Kratos besides reported a quarterly book-to-bill ratio of 1.2, foreshadowing adjacent stronger income maturation to come, and raised its guidance for fiscal 2026 integrated gross maturation to 15% to 20%, accelerating to 18% to 23% successful fiscal 2027.

The institution was profitable successful Q3, earning $0.05 per share, and has earned $0.10 per stock truthful acold this year, but Kratos's escaped currency travel is antagonistic -- and absorption expects it to stay antagonistic done the extremity of this year.

Is that bully capable to thrust Kratos banal from $79 (Friday) to $150 (a twelvemonth from now)? I'm not definite it is. 15%, 18%, 20%, oregon 23% would each beryllium slower growth rates than what Kratos produced successful Q3. And if the company's lone earning, say, $0.20 a year, that's a P/E ratio of much than 400x astatine the stock's existent price.

JonesResearch whitethorn deliberation 400 times net is simply a tenable terms for a maturation banal with slowing growth? I don't.

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