Kratos Defense & Security Solutions, Inc.
Kratos Defense & Security Solutions, Inc. Fundamental Analysis
Kratos Defense & Security Solutions, Inc. (KTOS) shows weak financial fundamentals with a PE ratio of 817.80, profit margin of 1.56%, and ROE of 1.20%. The company generates $1.3B in annual revenue with moderate year-over-year growth of 9.57%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 40.4/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze KTOS's fundamental strength across five key dimensions:
Efficiency Score
WeakKTOS struggles to generate sufficient returns from assets.
Valuation Score
WeakKTOS trades at a premium to fair value.
Growth Score
ModerateKTOS shows steady but slowing expansion.
Financial Health Score
ExcellentKTOS maintains a strong and stable balance sheet.
Profitability Score
WeakKTOS struggles to sustain strong margins.
Key Financial Metrics
Is KTOS Expensive or Cheap?
P/E Ratio
KTOS trades at 817.80 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, KTOS's PEG of 27.26 indicates potential overvaluation.
Price to Book
The market values Kratos Defense & Security Solutions, Inc. at 8.25 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 179.50 times EBITDA. This signals the market has high growth expectations.
How Well Does KTOS Make Money?
Net Profit Margin
For every $100 in sales, Kratos Defense & Security Solutions, Inc. keeps $1.56 as profit after all expenses.
Operating Margin
Core operations generate 1.59 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $1.20 in profit for every $100 of shareholder equity.
ROA
Kratos Defense & Security Solutions, Inc. generates $0.83 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Kratos Defense & Security Solutions, Inc. generates limited operating cash flow of $-8.42M, signaling weaker underlying cash strength.
Free Cash Flow
Kratos Defense & Security Solutions, Inc. generates weak or negative free cash flow of $-91.33M, restricting financial flexibility.
FCF Per Share
Each share generates $-0.54 in free cash annually.
FCF Yield
KTOS converts -0.58% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
817.80
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
27.26
vs 25 benchmark
P/B Ratio
Price to book value ratio
8.25
vs 25 benchmark
P/S Ratio
Price to sales ratio
12.46
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.07
vs 25 benchmark
Current Ratio
Current assets to current liabilities
4.30
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.01
vs 25 benchmark
ROA
Return on assets percentage
0.008
vs 25 benchmark
ROCE
Return on capital employed
0.010
vs 25 benchmark
How KTOS Stacks Against Its Sector Peers
| Metric | KTOS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 817.80 | 26.49 | Worse (Expensive) |
| ROE | 1.20% | 1307.00% | Weak |
| Net Margin | 1.56% | -5131.00% (disorted) | Weak |
| Debt/Equity | 0.07 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 4.30 | 10.48 | Strong Liquidity |
| ROA | 0.83% | -1549793.00% (disorted) | Weak |
KTOS outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Kratos Defense & Security Solutions, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
12.67%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
-7.23%
Industry Style: Cyclical, Value, Infrastructure
DecliningFCF CAGR
17.86%
Industry Style: Cyclical, Value, Infrastructure
High Growth