Kratos Defense & Security Solutions

KTOS

Aerospace & Defense · Industrials

Price

$46.03

-0.93 (-1.98%)

Market Cap

$8.63B

Exchange

NASDAQ

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count rising — dilution

+35.2% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 128.0M (2021) → 173.1M (2025)

Kratos Defense & Security Solutions, Inc. operates as a government contractor of the U.S. Department of Defense. The company operates through two segments, Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment offers microwave electronic products, space and satellite communications, training and cybersecurity/ warfare, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial sy

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+21.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+15.3% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$40M/ year

→ Flat (-1% vs prior year)

3.0% of revenue

Below sector average (4%)

Steady R&D investment year-over-year

Insider Activity

1.5%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

5+ years

Quarterly Free Cash Flow

↓ Burn rate worsening

$561M cash & investments at current burn rate

Growth context

Kratos Defense & Security Solutions is growing revenue at 22% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

21.4%

Thin — 21.4% gross margin

Operating Margin

3.0%

Thin — 3.0% operating margin

ROCE

0.5%

Weak — 0.5% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+18.5%

Fast-growing sales (18.5% YoY)

EPS YoY

+23.3%

Earnings growing fast (23.3% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

-191%

Weak — only -191% of profit becomes cash

FCF Margin

-10.2%

Burning cash (-10.2%)

Free cash flow is negative. They are burning cash, not generating it.

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Stability

Debt / Equity

0.03

Conservative — low debt load (0.03)

Interest Cover

30.78x

Comfortably covers interest (30.8x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

339.5x

Expensive — P/E 339.5

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+299.7

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (339.5 → 39.8)

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Dividends

Not applicable for this business.

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