Critical Survey: Kratos Defense & Security Solutions (KTOS) and Its Competitors

Kratos Defense & Security Solutions (NASDAQ:KTOS) is one of 229 public companies in the “Aerospace & Defense” industry, but how does it contrast to its peers? We will compare Kratos Defense & Security Solutions to related businesses based on the strength of its institutional ownership, valuation, earnings, risk, profitability, dividends and analyst recommendations.

Risk and Volatility

Kratos Defense & Security Solutions has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, Kratos Defense & Security Solutions’ peers have a beta of 1.38, suggesting that their average share price is 38% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Kratos Defense & Security Solutions and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Kratos Defense & Security Solutions	2	1	20	3	2.92
Kratos Defense & Security Solutions Competitors	2156	8257	12757	580	2.50

Kratos Defense & Security Solutions currently has a consensus target price of $81.70, indicating a potential upside of 132.76%. As a group, “Aerospace & Defense” companies have a potential upside of 32.40%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher possible upside, equities analysts clearly believe Kratos Defense & Security Solutions is more favorable than its peers.

Institutional and Insider Ownership

75.9% of Kratos Defense & Security Solutions shares are held by institutional investors. Comparatively, 49.5% of shares of all “Aerospace & Defense” companies are held by institutional investors. 1.5% of Kratos Defense & Security Solutions shares are held by company insiders. Comparatively, 11.9% of shares of all “Aerospace & Defense” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Kratos Defense & Security Solutions and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Kratos Defense & Security Solutions	$1.35 billion	$22.00 million	206.47
Kratos Defense & Security Solutions Competitors	$8.43 billion	$569.54 million	23.48

Kratos Defense & Security Solutions’ peers have higher revenue and earnings than Kratos Defense & Security Solutions. Kratos Defense & Security Solutions is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Kratos Defense & Security Solutions and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Kratos Defense & Security Solutions	1.34%	3.32%	2.76%
Kratos Defense & Security Solutions Competitors	-278.66%	-46.58%	-3.99%

Summary

Kratos Defense & Security Solutions beats its peers on 9 of the 13 factors compared.

Kratos Defense & Security Solutions Company Profile

Kratos Defense & Security Solutions, Inc. engages in the provision of mission critical products, services and solutions for United States national security priorities. It operates through the Kratos Government Solutions (KGS) and Unmanned Systems (US) segments. The KGS segment consists of an aggregation of KGS operating segments, including microwave electronic products, space, satellite and cyber, training solutions. The US segment refers to the unmanned aerial, unmanned ground, unmanned seaborne and related command, control and communications system businesses. The company was founded on December 19, 1994, and is headquartered in Round Rock, TX.