Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is in the spotlight Monday after B. Riley Securities reiterated a Buy rating and $128 price target, drawing attention to Kratos’ valuation gap versus private defense company Anduril.
- Kratos Defense & Security stock is rising today. What’s behind KTOS gains?
The Anduril Comparison
B. Riley notes Kratos trades at just 4.3x FY26 EV/Sales, compared to Anduril’s implied valuation of more than 23x sales, based on Anduril’s reported funding round at a $100 billion valuation. While Anduril’s projected growth (nearly 100% to $4.3 billion in FY26) outpaces Kratos’ roughly 30% top-line growth, B. Riley argues Kratos offers “outstanding relative value” at its current multiple — which also sits below the 6.0x median FY26 EV/Sales multiple of its broader public defense peer group.
“As such, we like KTOS into earnings and point to several high-profile wins in recent weeks as evidence of its continued success,” the analyst said.
Beyond the valuation gap, B. Riley points to Kratos’ expanding $14.3 billion bid and proposal pipeline, ongoing capacity expansion across its hypersonic and unmanned systems businesses and a new Prometheus Energetics joint venture with Israeli defense firm RAFAEL as key drivers of the firm’s bullish stance ahead of earnings next week.
Kratos Looks Attractive Ahead of Q2 Earnings
Kratos is scheduled to report second-quarter earnings on Aug. 4. Analysts estimate EPS of 14 cents along with revenue of $410.38 million. For the prior quarter, Kratos reported EPS of 16 cents, beating the consensus estimate of 13 cents. The company also posted revenue of $371.0 million, beating the consensus estimate of $339.84 million.
Investors will be tracking whether Kratos can sustain the organic revenue growth pace embedded in its full-year guidance of $1.70 billion to $1.76 billion, representing 15% to 19% growth. Margin trajectory will also be closely watched, as management has guided for roughly 100 basis points of year-over-year EBITDA margin improvement in 2026, with further expansion targeted for 2027.
Progress on the Valkyrie production ramp and updates on new defense contract wins, including recent momentum in propulsion and counter-drone systems, should offer additional signals on whether Kratos can convert its growing backlog into consistent execution.
Kratos Trades 37% Below Its 200-Day Average
Even with Monday’s pop, Kratos is still trading 1.9% below its 20-day SMA ($49.13) and 9.9% below its 50-day SMA ($53.44), which keeps the intermediate trend tilted lower. The bigger picture is heavier: the stock is 24.3% below the 100-day SMA ($63.67) and 37% below the 200-day SMA ($76.47).
MACD is the cleaner momentum read right now: it’s above its signal line and the histogram is positive, which points to improving momentum versus the prior downswing even if price hasn’t reclaimed key moving averages yet. Put simply, when MACD is above its signal line, it suggests downside pressure is easing and buyers are starting to show up earlier on dips.
- Key Resistance: $54.00 — a round-number area that also lines up closely with the 50-day moving average zone where rebounds can stall
- Key Support: $46.00 — a nearby floor near the 52-week low area ($45.58) where buyers have recently shown up
Kratos Shares Edge Higher
KTOS Price Action: At the time of writing, Kratos shares are trading 2.01% higher at $48.30, according to data from Benzinga Pro.
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