AVAV vs KTOS: How AeroVironment and Kratos Defense & Security Solutions Compare (2026)

Same yardstick, side by side (as of July 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.

Reading it: AVAV is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.

The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. AVAV and KTOS share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.

This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined AVAV and KTOS exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.

AeroVironment (AVAV) is a defense technology company specializing in unmanned and autonomous systems. It is best known for small, man-portable drones used by militaries for reconnaissance and surveillance, and for loitering munitions, notably the Switchblade family, which are precision-strike drones that have drawn significant attention from conflicts and rising global demand. AeroVironment also builds larger unmanned aircraft systems, uncrewed ground robots, and develops autonomy software and counter-drone solutions. Its primary customer is the US Department of Defense, with growing international and allied-government sales. The company has expanded through acquisitions into adjacent areas such as space, loitering munitions, and autonomy. The investment story centers on the structural growth of drones and autonomous systems in modern warfare, where small, attritable, intelligent systems are reshaping how militaries operate. Founded in 1971 and historically associated with pioneering work in efficient flight, AeroVironment is headquartered in Arlington, Virginia, and is a mid-cap defense growth company tied closely to defense budgets and procurement.

Full AVAV guide

Kratos Defense & Security Solutions (KTOS) is a defense technology company that specializes in affordable, high-performance systems the U.S. military wants to buy in volume. Its two segments are Unmanned Systems, home to the XQ-58 Valkyrie collaborative combat aircraft and other tactical drones and target drones, and Kratos Government Solutions, which spans hypersonic systems (Erinyes, Dark Fury), solid rocket motors, turbine and jet engines, microwave electronics, C5ISR, space, training and cyber. The common thread is being the low-cost, fast-to-field alternative to legacy prime contractors, which lines up with Pentagon demand for attritable, mass-producible hardware.

Full KTOS guide

Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.

• AVAV drivers: Loitering munitions demand; Small unmanned systems franchise.
• KTOS drivers: Valkyrie and collaborative combat aircraft; Hypersonics, rockets and engines.

A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: AeroVironment depends heavily on US defense procurement, so budget cycles, appropriations timing, and program decisions cause lumpy, hard-to-predict revenue and order flow. For KTOS, valuation is the dominant risk: with a triple-digit price-to-earnings ratio, the stock prices in years of sustained growth and any stumble can drive a sharp derating.

Pick AVAV if you believe its drivers more; KTOS if you believe its. Many investors hold both, but since they share themes, that is a concentrated bet, not diversification. Decide deliberately and check overlap. For the full detail, see the AVAV and KTOS guides.

AVAV. AeroVironment trades on a growth multiple that reflects its leadership in fast-growing drone and loitering-munition categories rather than current earnings. The valuation embeds expectations of sustained defense procurement growth and successful expansion into autonomy and space. It is more volatile and richly valued than traditional defense primes, sensitive to order timing and conflict-driven demand swings.

KTOS. As of the March 2026 quarter, Kratos posted about $371 million in Q1 revenue, up roughly 23 percent year over year, and raised full-year 2026 guidance toward $1.7 to $1.76 billion. Net income remains small, so with a market cap around $10 billion the price-to-earnings ratio sits in the hundreds and price-to-sales is roughly 7 times. The valuation reflects growth and backlog expectations far more than current earnings.

Headline figures (approximate, early 2026): AVAV shows revenue (ttm) ~$800 million-$1 billion, operating margin ~low-double-digit percent, net income (ttm) Modest; growth reinvested, p/e (ttm) Elevated (growth multiple); KTOS shows revenue (q1 2026) ~$371M, revenue (ttm) ~$1.4B, fy2026 revenue guidance ~$1.7B to $1.76B, adjusted ebitda (fy2025) ~$120M.

AVAV and KTOS are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined AVAV and KTOS exposure against your real portfolio. It is not an investment adviser.