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Investing.com - Cantor Fitzgerald has reiterated its Overweight rating and $60.00 price target on Kratos Defense & Security (NASDAQ:KTOS).
The investment firm based its valuation on a weighted average of two approaches: EV/EBITDA (50%) and EV/Revenue (50%) versus fiscal year 2027 estimates.
Cantor Fitzgerald identified several potential catalysts for Kratos, including X-58 scaling, microwave electronics opportunities, and munitions opportunities, which it believes could push the company’s valuation above historical levels.
The firm noted that while the valuation appears stretched compared to competitors and historical levels, it expects Kratos to approach Space-like valuation multiples of approximately 50-100 times EBITDA on a three-year forward basis.
Unlike Space sector companies that may face headwinds to longer-term cash generation, Cantor Fitzgerald believes Kratos is well-positioned to deliver a multi-decade, cash-compounding engine that can ultimately allow the company to grow its multiple.
In other recent news, Kratos Defense & Security has been the focus of several analyst upgrades and strategic developments. Noble Capital raised its price target for Kratos to $60, highlighting the company’s growth opportunities in both defense and commercial sectors. This follows a recent capital raise that positions Kratos to pursue these opportunities more aggressively. Benchmark also increased its price target to $50, citing the impact of the FY26 defense budget and a $150 billion Reconciliation Bill that directly benefits Kratos programs. The firm noted that Kratos’ low-cost advanced technology solutions are well-suited to current defense needs. Stifel raised its price target to $54, following Kratos’ $500 million equity raise, which is expected to fund future investments and operations, including the Prometheus joint venture with Rafael Advanced Defense Systems. The partnership is anticipated to become a significant earnings contributor, bolstered by the effectiveness of Rafael’s Iron Dome system. Additionally, a Pentagon directive to ramp up drone production has positively impacted Kratos, aligning with its strategic focus on defense technologies.
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