Kratos Defense & Security Solut (KTOS) Stock Price & How to Invest

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.

The investment picture is one of accelerating growth against a demanding valuation. Full-year 2025 revenue was roughly $1.35 billion, and Q1 2026 revenue jumped about 23 percent year over year to around $371 million, prompting management to lift full-year 2026 guidance toward $1.7 to $1.76 billion with a record backlog near $2 billion. But margins are thin and net income is small, so the stock carries a very high price-to-earnings ratio and trades far more on backlog, program wins and the hypersonics and Valkyrie ramp than on trailing profits.

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. Kratos depends on U.S. government budgets, appropriations timing and program-of-record decisions, all of which can slip or be cut. Many flagship programs (Valkyrie, hypersonics) are still scaling, so production, supply-chain and execution risk is real. Competition comes from far larger primes like Lockheed Martin, Boeing, Northrop Grumman and RTX, plus focused drone makers, which can pressure pricing and win rates. Thin operating margins mean profitability remains modest even as revenue grows.

21 analysts publish price targets on KTOS, averaging $109.33 against a $46.60 price as of August 2026, or +134.6%. The published targets run from $60.00 to $150.00, a wide spread, and the ratings split 18 buy, 3 hold, 0 sell. Over the last six months there have been 3 raises and 6 cuts among the published actions. A price target is what an analyst published on a date, not a prediction, and sell-side ratings skew positive across the whole market.

Read the full KTOS forecast and price target for the target table, the recent rating actions by firm, and how the consensus has shifted.

We give no verdict on Kratos Defense & Security Solut. Both cases are real, which is why the question is contested at all, so here is the strongest version of each.

The case for buying. Valkyrie and collaborative combat aircraft. The XQ-58 Valkyrie is transitioning from an experimental testbed toward operational programs, including selection alongside Northrop Grumman for a Marine Corps collaborative combat aircraft effort and an Airbus partnership targeting the German Air Force. The most optimistic published target, $150.00, assumes this works close to its best case.

The case against. 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. The most pessimistic target, $60.00, is roughly what KTOS is worth if this bites instead.

Read the full bull and bear case on KTOS, including what would have to change to break either one. Walnut is not an investment adviser.

A simple financial snapshot. These are approximations and refresh quarterly; for current figures see Kratos Defense & Security Solut's investor relations page or your broker.

• Revenue (Q1 2026): ~$371M
• Revenue (TTM): ~$1.4B
• FY2026 revenue guidance: ~$1.7B to $1.76B
• Adjusted EBITDA (FY2025): ~$120M
• Backlog: ~$2.0B
• Market cap: ~$10B

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.

If you want KTOS exposure as part of a larger bundle rather than directly, these ETFs hold it meaningfully. Weights are approximate and refresh quarterly.

These are the investment theses KTOS naturally fits into. Each links to a full theme guide listing every other stock that belongs and the ETFs commonly used as a passive proxy.

Other names that sit close to KTOS: same theme, named as a direct competitor, or held beside it in the same funds. Each entry says which. Worth a look if you are thinking about diversification within a thesis rather than concentration on one ticker.

There are three common ways to get KTOS exposure. Buy shares (or fractional shares) directly at any major broker. Hold an ETF that includes it (ARKQ, ARKX), which spreads the position across many companies. Or build it into a focused thematic portfolio, so KTOS sits alongside other stocks that express the same thesis.

Walnut takes the portfolio route. Describe a thesis where KTOS fits (for example “AI infrastructure” or “dividend-growth large-caps”) and the AI proposes 5 to 6 constituents with target weights. You review the plan and fund it through your own broker when you're ready.

New to this? Start with how to invest in stocks, see how to analyze a stock with AI, or compare the best AI stock analyzers.

Kratos is a fast-growing pure-play on cheap drones and hypersonics whose rich valuation prices in years of the growth continuing.

Whether KTOS is worth buying today depends more on your time horizon and what you already hold than on any single call. We walk through valuation, what would have to go right, and the risks in is KTOS a buy or a sell?, and where the stock could go from here in the KTOS stock forecast.

For income investors, whether KTOS pays a dividend and how the payout looks is covered in does KTOS pay a dividend? And to weigh KTOS against a peer, read the full side-by-side comparisons: KTOS vs AVAV and KTOS vs ONDS.