Kratos Defense Stock Drops 5% Despite Analyst Upgrade
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 28 2026
0mins
Should l Buy KTOS?
Source: Fool
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.
Despite the decline, 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. However, the company reported only $20 million in net income, significantly lower than the $79.6 million earned in 2020, indicating ongoing profitability issues. Additionally, Kratos' free cash flow over the past 12 months is negative $93.3 million, raising concerns about its financial health.
The stock's performance highlights a disconnect between analyst optimism and market realities, as investors remain cautious about Kratos' ability to convert revenue growth into sustainable profits.
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Analyst Views on KTOS
Wall Street analysts forecast KTOS stock price to rise
13 Analyst Rating
11 Buy
2 Hold
0 Sell
Strong Buy
Current: 97.210
Low
80.00
Averages
108.69
High
150.00
Current: 97.210
Low
80.00
Averages
108.69
High
150.00
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.
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