Kratos Defense stock fell 5% by 12:12 p.m. ET on Wednesday, currently priced at $111.83 with a market cap of $20 billion, reflecting market concerns over its future profitability.
KeyBanc analyst Michael Leshock raised Kratos' price target by nearly 50% to $130 per share, citing significant growth opportunities in the space and defense sectors expected to persist through 2026. Despite this analyst upgrade, the stock's decline indicates ongoing investor skepticism regarding profitability, particularly given the company's negative free cash flow of $93.3 million over the past 12 months.
The implications of this situation suggest that while analysts remain optimistic about Kratos' long-term growth potential, immediate market reactions reflect caution. Investors may need to weigh the company's revenue growth against its profitability challenges and high valuation metrics.
Wall Street analysts forecast KTOS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for KTOS is 108.69 USD with a low forecast of 80.00 USD and a high forecast of 150.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
13 Analyst Rating
Wall Street analysts forecast KTOS stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for KTOS is 108.69 USD with a low forecast of 80.00 USD and a high forecast of 150.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
11 Buy
2 Hold
0 Sell
Strong Buy
Current: 112.670
Low
80.00
Averages
108.69
High
150.00
Current: 112.670
Low
80.00
Averages
108.69
High
150.00
KeyBanc
Overweight
maintain
$90 -> $130
2026-01-28
New
Reason
KeyBanc
Price Target
$90 -> $130
AI Analysis
2026-01-28
New
maintain
Overweight
Reason
KeyBanc raised the firm's price target on Kratos Defense to $130 from $90 and keeps an Overweight rating on the shares. Post the swath of recent events and headlines directly impacting the space and defense technology industries, the firm is updating view on the sector. KeyBanc sees an ideal macro environment persisting through 2026, driving significant growth opportunities and potential re-ratings of space and defense tech equities.
Piper Sandler
Neutral
initiated
$99
2026-01-21
Reason
Piper Sandler
Price Target
$99
2026-01-21
initiated
Neutral
Reason
Piper Sandler initiated coverage of Kratos Defense with a Neutral rating and $99 price target. While the firm believes Kratos is "a disruptive production-ready defense contractor well positioned to benefit from the transformative changes in procurement within the DoD," and views the company's portfolio as "highly aligned" to the attractive growth categories in the industry, it notes that shares have surged about 50% over just 13 trading days in 2026. The firm believes the current rally does not present an attractive enough entry point based on the information of today, the analyst tells investors.
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Goldman Sachs
Anthony Valentini
Buy
maintain
$93 -> $125
2026-01-20
Reason
Goldman Sachs
Anthony Valentini
Price Target
$93 -> $125
2026-01-20
maintain
Buy
Reason
Goldman Sachs analyst Anthony Valentini raised the firm's price target on Kratos Defense to $125 from $93 and keeps a Buy rating on the shares. The firm's Q4 Aerospace & Defense preview highlights favorable aerospace OE conditions, with supply below demand, while aftermarket growth outpaces global ASMs with strong pricing supporting margins, the analyst tells investors in a research note. Business jet demand remains solid amid tight supply, defense hardware growth is improving though margins face risk from shifting contracts, defense tech momentum emphasizes faster, commercial-style providers, and federal IT obligations continue under pressure, the firm says.
Noble Capital
Outperform
maintain
$95 -> $145
2026-01-20
Reason
Noble Capital
Price Target
$95 -> $145
2026-01-20
maintain
Outperform
Reason
Noble Capital raised the firm's price target on Kratos Defense to $145 from $95 and keeps an Outperform rating on the shares. Interest in the defense sector is partially being driven by the Trump Administration's goal to increase the 2027 defense budget by 50% to $1.5 trillion, notes the analyst, who believes "abundant opportunities across the business," potential positive increases in the defense budget, and solid execution present "strong" upside potential.
About KTOS
Kratos Defense & Security Solutions, Inc. is a technology, products, system and software company addressing the defense, national security, and commercial markets. It operates through two segments: Kratos Government Solutions (KGS) and Unmanned Systems (US). The KGS segment includes its microwave electronic products, space, satellite and cyber, training solutions, command, control, communication, computing, combat, intelligence surveillance and reconnaissance (C5ISR)/modular systems, turbine technologies, and defense and rocket support services operating segments. The US segment consists of its unmanned aerial, unmanned ground, unmanned seaborne and related command, control and communications system businesses. Its KGS and US segments provide products, solutions and services for mission-critical National Security programs. KGS and US customers primarily include National Security-related agencies, the DoD, intelligence agencies and classified agencies, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
