Kratos Defense & Security Solutions (NASDAQ:KTOS) Trading Down 3% – Time to Sell?

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s stock price was down 3% during trading on Friday . The company traded as low as $108.36 and last traded at $110.39. Approximately 3,990,463 shares changed hands during mid-day trading, a decline of 16% from the average daily volume of 4,763,854 shares. The stock had previously closed at $113.85.

Key Stories Impacting Kratos Defense & Security Solutions

Here are the key news stories impacting Kratos Defense & Security Solutions this week:

• Positive Sentiment: Goldman Sachs reiterated a Buy on KTOS, reinforcing institutional support for the name and providing a near-term demand catalyst for the stock. Goldman Sachs remains a buy on Kratos Defense & Security Solutions (KTOS)
• Positive Sentiment: Sector tailwinds: a Zacks piece highlights KTOS as one of several defense names positioned to benefit from renewed U.S. defense priorities and expected higher spending — a supportive macro driver for revenue growth expectations. 3 Stocks Positioned to Gain From Renewed U.S. Defense Priorities
• Positive Sentiment: Noble Financial raised its FY2026 EPS estimate for KTOS (to $0.54 from $0.43) and maintains an Outperform — this upward revision signals improving analyst earnings outlook versus consensus and supports upside potential. Noble Financial raises FY2026 EPS estimate
• Neutral Sentiment: Valuation review: multiple outlets (Seeking Alpha, Yahoo Finance) note KTOS’s sharp run-up and elevated valuation metrics; these analyses suggest investors weigh upside from growth against high multiples. Kratos Defense: Stretched Valuation But Options Offer Attractive Returns
• Neutral Sentiment: Analyst/estimate updates: separate short notes (AmericanBankingNews / Noble) published updated Q1/FY estimates — useful for modeling but not singularly directional. Q1 Earnings Estimate for KTOS Issued By Noble Financial
• Negative Sentiment: Piper Sandler initiated coverage with a Neutral rating and a $99 price target (implying downside from recent levels) — a tangible bearish/tempering datapoint that likely weighs on sentiment. Piper Sandler initiates coverage of Kratos Defense & Security Solutions (KTOS) with neutral recommendation
• Negative Sentiment: Investor note: an Alger-managed fund letter and coverage write-ups flagged that recent management remarks weighed on Q4 sentiment — suggesting execution or messaging concerns that can pressure the stock pending clarity. Management Remarks Weighed on Kratos Defense & Security Solutions (KTOS) in Q4

Analysts Set New Price Targets

Several equities analysts recently issued reports on KTOS shares. Jones Trading assumed coverage on shares of Kratos Defense & Security Solutions in a report on Monday, January 5th. They issued a “buy” rating on the stock. Robert W. Baird boosted their price objective on Kratos Defense & Security Solutions from $70.00 to $87.00 and gave the company an “outperform” rating in a research note on Friday, September 26th. Piper Sandler began coverage on Kratos Defense & Security Solutions in a research report on Wednesday. They set a “neutral” rating and a $99.00 target price on the stock. Truist Financial set a $135.00 target price on Kratos Defense & Security Solutions in a research note on Friday, January 9th. Finally, BNP Paribas Exane set a $80.00 price target on Kratos Defense & Security Solutions in a research note on Tuesday, November 18th. One analyst has rated the stock with a Strong Buy rating, sixteen have issued a Buy rating and five have given a Hold rating to the stock. According to data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average price target of $93.06.

Kratos Defense & Security Solutions Stock Down 3.0%

The stock has a market cap of $18.64 billion, a price-to-earnings ratio of 849.22 and a beta of 1.09. The stock has a 50 day simple moving average of $86.04 and a 200 day simple moving average of $77.65. The company has a quick ratio of 3.68, a current ratio of 4.30 and a debt-to-equity ratio of 0.04.

Kratos Defense & Security Solutions (NASDAQ:KTOS) last issued its earnings results on Tuesday, November 4th. The aerospace company reported $0.14 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.12 by $0.02. Kratos Defense & Security Solutions had a return on equity of 3.14% and a net margin of 1.56%.The company had revenue of $347.60 million for the quarter, compared to analysts’ expectations of $323.01 million. During the same period last year, the business earned $0.11 EPS. Kratos Defense & Security Solutions’s quarterly revenue was up 26.0% compared to the same quarter last year. As a group, analysts expect that Kratos Defense & Security Solutions, Inc. will post 0.31 earnings per share for the current fiscal year.

Insider Activity

In other Kratos Defense & Security Solutions news, CFO Deanna H. Lund sold 30,000 shares of Kratos Defense & Security Solutions stock in a transaction dated Monday, December 1st. The stock was sold at an average price of $74.08, for a total transaction of $2,222,400.00. Following the completion of the transaction, the chief financial officer owned 273,285 shares in the company, valued at approximately $20,244,952.80. The trade was a 9.89% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, insider Jonah Adelman sold 30,000 shares of the business’s stock in a transaction that occurred on Tuesday, November 25th. The stock was sold at an average price of $74.80, for a total value of $2,244,000.00. Following the sale, the insider directly owned 9,348 shares of the company’s stock, valued at $699,230.40. This represents a 76.24% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Over the last three months, insiders sold 911,815 shares of company stock valued at $74,226,491. 2.37% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several hedge funds have recently modified their holdings of KTOS. Alliancebernstein L.P. raised its position in Kratos Defense & Security Solutions by 1,389.0% in the 3rd quarter. Alliancebernstein L.P. now owns 2,707,776 shares of the aerospace company’s stock valued at $247,409,000 after buying an additional 2,525,921 shares during the last quarter. Rovida Advisors Inc. purchased a new stake in shares of Kratos Defense & Security Solutions in the second quarter valued at about $82,315,000. Franklin Resources Inc. raised its holdings in shares of Kratos Defense & Security Solutions by 29.6% in the second quarter. Franklin Resources Inc. now owns 5,086,494 shares of the aerospace company’s stock valued at $236,268,000 after purchasing an additional 1,162,577 shares during the last quarter. Westfield Capital Management Co. LP purchased a new position in Kratos Defense & Security Solutions during the third quarter worth about $91,901,000. Finally, Allspring Global Investments Holdings LLC bought a new stake in Kratos Defense & Security Solutions in the 2nd quarter worth about $37,475,000. Hedge funds and other institutional investors own 75.92% of the company’s stock.

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc (NASDAQ: KTOS) is a technology-driven company that specializes in national security and defense solutions for government and military customers. The firm’s core capabilities span unmanned systems, satellite communications, missile defense, cyber security, and directed-energy weapons. Through its integrated approach, Kratos delivers mission-critical products and services designed to enhance operational readiness and support force modernization initiatives.

In the unmanned systems arena, Kratos develops high-performance aerial platforms used as target drones, low-cost attritable aircraft and experimental stealth demonstrators.