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Investing.com - Citizens has reiterated its Market Outperform rating and $105.00 price target on Kratos Defense & Security (NASDAQ:KTOS) following the company’s third-quarter 2025 results.
Kratos reported non-GAAP earnings per share of $0.14 for the third quarter, exceeding the consensus estimate of $0.13. The company’s adjusted EBITDA reached $30.8 million, surpassing analyst expectations of $28.3 million. InvestingPro data shows Kratos trading at an extremely high EV/EBITDA multiple of 184, reflecting investor optimism about future growth.
Revenue for the quarter totaled $347.6 million, representing approximately 26% year-over-year growth and exceeding the consensus forecast of $320.8 million. Despite these positive results, Kratos reported negative free cash flow of $41.3 million, which fell short of the anticipated negative $2.2 million. This continues a challenging cash flow trend, as InvestingPro data indicates negative levered free cash flow of $93.3 million over the last twelve months.
Kratos Defense & Security stock has gained approximately 193% year to date, even after declining about 14% during Thursday’s trading session. This performance significantly outpaces both the S&P Aerospace & Defense ETF (XAR), which has risen approximately 44% year to date, and the Russell 3000, which has increased about 15% in the same period.
Citizens maintained its positive outlook on the defense contractor despite the mixed results, keeping both its Market Outperform rating and $105 price target unchanged. InvestingPro identifies additional insights with several ProTips, including that Kratos is expected to grow its net income this year while trading at an extremely high P/E ratio of 823. For deeper analysis and a comprehensive research report on Kratos, investors can access the full Pro Research Report available for this and 1,400+ other US equities.
In other recent news, Kratos Defense & Security Solutions reported its third-quarter 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.14, beating the forecasted $0.12. The company also exceeded revenue forecasts, posting $347.6 million compared to the expected $322.7 million. Following these results, Kratos Defense raised its revenue growth outlook for 2025 and 2026, and provided guidance for 2027. Analyst firms have responded positively to these developments. Stifel reiterated its Buy rating with a price target of $112, noting the 24% organic growth in revenue. Truist Securities also maintained its Buy rating with a target of $125, citing the better-than-expected revenue and earnings. Additionally, Raymond James raised its price target to $97 from $80, highlighting the double-digit organic growth and strong book-to-bill ratio. These updates reflect a positive sentiment among analysts regarding Kratos Defense’s financial health and future prospects.
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