Kratos Defense & Security Solutions (NASDAQ:KTOS) Shares Gap Down – Should You Sell?

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)’s stock price gapped down prior to trading on Tuesday . The stock had previously closed at $94.31, but opened at $88.75. Kratos Defense & Security Solutions shares last traded at $89.13, with a volume of 1,491,788 shares changing hands.

Key Stories Impacting Kratos Defense & Security Solutions

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

• Positive Sentiment: Kratos won a $61.1 million U.S. Navy contract modification for full‑rate production of 70 BQM‑177A subsonic aerial targets — a near‑term, funded production order that should translate directly into revenue and reinforces Kratos’s position in the DOD production pipeline. Kratos Lands $61.1M Navy Drone Deal—Analysts Eye 17% Upside
• Positive Sentiment: Kratos completed the Critical Design Review (CDR) for the Space Development Agency’s Advanced Fire Control Ground Infrastructure (AFCGI) with zero liens, validating multi‑partner integration and de‑risking future program deliveries and revenues tied to SDA work. Kratos Completes CDR for SDA AFCGI
• Positive Sentiment: BTIG raised its price target on KTOS to $115, reflecting increased analyst optimism after recent wins and technological positioning — analyst upgrades can attract buyers and support the rally. BTIG Raises KTOS Price Target to $115
• Neutral Sentiment: Kratos posted a Q4 beat (revenue +21.9% YoY; EPS above estimates) and reported a larger backlog, which supports medium‑term growth expectations but was broadly anticipated by the market. Q4 Earnings and Revenues Surpass Estimates
• Neutral Sentiment: Market commentary is mixed — many sources highlight Kratos’s leadership in unmanned, hypersonics and space, while others caution that institutional positioning and high expectations could mute near‑term upside. MarketBeat: Stock Poised for Acceleration
• Negative Sentiment: Shares earlier dropped after management issued weak Q1 guidance and signaled continued cash consumption tied to production ramps and inventory build — a headwind that has pressured near‑term sentiment despite the Q4 beat. Why KTOS Stock Fell After Guidance
• Negative Sentiment: An insider sale (Steven S. Fendley sold 7,000 shares) was disclosed; the size is modest versus his holdings but can add short‑term selling pressure or negative headlines. SEC Filing: Insider Sale
• Negative Sentiment: Valuation concerns remain prominent — some commentators point to very high P/E multiples, leaving shares vulnerable to profit‑taking if growth or cash‑flow timing slips. Valuation Concerns Article

Analyst Upgrades and Downgrades

Several research firms have issued reports on KTOS. Noble Financial reaffirmed an “outperform” rating on shares of Kratos Defense & Security Solutions in a research note on Tuesday, January 20th. The Goldman Sachs Group increased their price target on Kratos Defense & Security Solutions from $93.00 to $125.00 and gave the stock a “buy” rating in a research note on Tuesday, January 20th. UBS Group initiated coverage on Kratos Defense & Security Solutions in a research report on Wednesday, February 18th. They issued a “neutral” rating and a $79.00 price objective for the company. Piper Sandler initiated coverage on Kratos Defense & Security Solutions in a research note on Wednesday, January 21st. They issued a “neutral” rating and a $99.00 target price for the company. Finally, Citigroup reiterated a “market outperform” rating on shares of Kratos Defense & Security Solutions in a research report on Tuesday. One investment analyst has rated the stock with a Strong Buy rating, fifteen have given a Buy rating and six have issued a Hold rating to the stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and an average target price of $98.28.

Kratos Defense & Security Solutions Stock Performance

The company has a current ratio of 4.06, a quick ratio of 3.68 and a debt-to-equity ratio of 0.05. The firm has a market cap of $15.69 billion, a PE ratio of 708.79 and a beta of 1.09. The stock’s 50 day moving average price is $97.50 and its 200 day moving average price is $84.86.

Kratos Defense & Security Solutions (NASDAQ:KTOS) last announced its quarterly earnings results on Monday, February 23rd. The aerospace company reported $0.18 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.14 by $0.04. Kratos Defense & Security Solutions had a return on equity of 3.34% and a net margin of 1.63%.The firm had revenue of $345.10 million during the quarter, compared to the consensus estimate of $327.51 million. During the same period in the prior year, the firm earned $0.13 EPS. The firm’s quarterly revenue was up 21.9% compared to the same quarter last year. As a group, equities analysts forecast that Kratos Defense & Security Solutions, Inc. will post 0.31 earnings per share for the current fiscal year.

Insider Buying and Selling

In other news, insider Phillip D. Carrai sold 6,500 shares of the business’s stock in a transaction on Tuesday, February 17th. The shares were sold at an average price of $90.91, for a total transaction of $590,915.00. Following the transaction, the insider directly owned 213,325 shares of the company’s stock, valued at approximately $19,393,375.75. The trade was a 2.96% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, insider Steven S. Fendley sold 7,000 shares of the business’s stock in a transaction on Monday, February 23rd. The stock was sold at an average price of $92.57, for a total transaction of $647,990.00. Following the completion of the transaction, the insider owned 334,648 shares in the company, valued at $30,978,365.36. This represents a 2.05% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold 888,907 shares of company stock valued at $73,312,173 over the last three months. Company insiders own 2.37% of the company’s stock.

Institutional Trading of Kratos Defense & Security Solutions

Several institutional investors have recently added to or reduced their stakes in the stock. Mcguire Capital Advisors Inc. bought a new stake in shares of Kratos Defense & Security Solutions in the 4th quarter worth about $25,000. Atlantic Union Bankshares Corp grew its stake in Kratos Defense & Security Solutions by 7,600.0% in the fourth quarter. Atlantic Union Bankshares Corp now owns 385 shares of the aerospace company’s stock worth $29,000 after purchasing an additional 380 shares in the last quarter. TD Waterhouse Canada Inc. acquired a new position in Kratos Defense & Security Solutions in the second quarter worth about $30,000. Rakuten Securities Inc. bought a new stake in Kratos Defense & Security Solutions in the second quarter valued at about $31,000. Finally, Bayforest Capital Ltd acquired a new stake in Kratos Defense & Security Solutions during the third quarter valued at approximately $32,000. 75.92% of the stock is owned by institutional investors and hedge funds.

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.