Kratos Defense & Security Solutions, Inc. KTOS
Weak Emerging Frontier sector · Drones, propulsion, and space/defense systems.
Kratos Defense & Security Solutions, Inc. (KTOS) is an established Emerging Frontier company, graded Weak on FrontierLab's evidence-based quality rubric (data as of 2026-08-21). Revenue grew 25.5% year-over-year at a 22% gross margin. Gross-profits-to-assets is 0.08; Rule of 40 is 27. Net share issuance 20.8% YoY (heavy issuance). 3 risk flags are noted below. Analyst mix: 25 buy / 4 hold / 0 sell.
These sentences are generated from the day's data by deterministic templates.
Key quality signals
| Revenue growth (YoY) | 25.5% |
|---|---|
| Gross margin | 22% |
| Gross profits / assets | 0.08 |
| Rule of 40 | 27 |
| Net margin | 1.5% |
| Cash runway (months) | 120 |
| PEG | 4.7 |
| Price / sales | 6.9 |
Quality checklist
Each line is one quality test behind the grade — ✓ passed · ~ borderline · ✗ failed. Hover a metric in the tables below for what it means.
- ~ Revenue growth — 25.5% (pass ≥ 20%)
- ✗ Gross profits / assets — 0.08 (pass ≥ 0.33)
- · Rule of 40 — 27 (context — graded for software only)
- ✗ Gross margin — 22% (pass ≥ 45% · Emerging Frontier)
- ~ Cash generation
- ✗ Share dilution — 20.8%
- ~ Competitive moat — Narrow
- ✓ Market size (TAM) — Large
Grade history
Graded Weak since 2026-06-10 — no grade changes recorded yet.
How have Weak-graded names performed?
The forward returns of all Weak-graded names since each grade was recorded — the bucket this name currently sits in, not a forecast of this individual stock.
| Window | Forward record vs the S&P | Median |
|---|---|---|
| ~1 month | 60% of Weak-graded names beat the S&P over 21 sessions (95% CI 39–78%, N=20). | Median excess vs the S&P was +0.6%. |
| ~3 months | building — 13 more sessions needed | |
| ~6 months | building — 76 more sessions needed | |
How have this name's flags scored?
| Flag | N | Mean excess vs S&P |
|---|---|---|
| Thin gross margin — keeps little of each sales dollar (judge it against its industry). | 20 | +2.1% |
| Heavy dilution (~21%/yr) — top-decile share issuers have historically underperformed. | sample still too small to report (need ≥ 8) | |
| Hyper-expansion — assets up ~58% in a year; aggressive expanders have historically lagged. | sample still too small to report (need ≥ 8) | |
These per-flag figures are observational — a flag firing is not a randomized assignment, so any edge can reflect what kind of names trip a flag, not the flag itself. Descriptive, not causal.
Scope: these are forward returns vs the S&P among names still covered at each horizon's end, within the curated universe — not a survivorship-clean whole-market backtest. Names later dropped from coverage are counted as attrition (not hidden), and single-session moves beyond ±300% are treated as split/data artifacts and excluded. How this is measured → · Full track record →
How it compares
Coarse same-sector, same-stage context — not a percentile or rank. GP/A is graded on its absolute level, not position.
Fundamentals
| Market cap | $10.53B |
|---|---|
| Stage | Established |
| Share issuance (YoY) | 20.8% · heavy issuance |
| Moat | Narrow |
| TAM | LARGE |
| P/E (trailing) | 329.7 |
| EPS (trailing) | $0.17 |
| Burn multiple | — |
| Gross-margin trend (pts) | -1.6 |
| Cash / assets | 0.35 |
| Accruals (%) | 2.1% |
| Net debt / EBITDA | -10.5 |
| Statements as of | Q2 FY2026 · filed 2026-08-04 |
Momentum context — describes the past, not a signal
Low reached Jul 29, 2026 · high reached Jan 16, 2026 — by daily close.
| Price | $56.18 (as of 2026-08-20) |
|---|---|
| Last session move | — |
| % off 52-wk high | -58.1% |
| RSI (14) | 50 |
| Relative volume | 1.1× |
Risk flags
Positive signals
Insider activity (90 days)
| Cluster buyers | 0 |
|---|---|
| Sellers | 9 |
Insider selling is routine diversification, not a bearish signal.
Analyst mix
| Strong buy | 10 |
|---|---|
| Buy | 15 |
| Hold | 4 |
| Sell | 0 |
| Strong sell | 0 |
Ratings are context, not a price target. "Momentum" = how the mix changed over recent weeks, not a forecast.
From the headlines
- Kratos: A Production Powerhouse That No Longer Feels Speculative
- Kratos: Demand Is Proven, But The Price Requires Execution
- Kratos: A Cautious Buy At The Inflection Point, Hinged On Margin Improvement
AI take — daily, AI-generated
AI leans cautious
Decent growth (25.5%) but weak margins (22%), high PEG (4.7), and low GP/A suggest valuation doesn't match quality.
Generated by an AI model from the day's news — an opinion for context only. Not financial advice, not a recommendation, and not a price target.
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Data as of 2026-08-21 08:12 (end-of-day). How grades are computed →