Kratos receives $3.4M Navy contract for aerial target support

SAN DIEGO - Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS), a company specializing in defense and national security technology, has been awarded a $3.4 million contract from the U.S. Navy. The contract is for the base year of Contractor Logistics Support and Engineering Services to support the BQM-177A Subsonic Aerial Target System operations.

The BQM-177A is designed to replicate advanced subsonic anti-ship cruise missile threats and is used by the Navy for various training and testing missions. The initial contract value for the base year is $3,399,506, with the possibility of reaching a total value of $19,118,645 if all four option years are exercised. The company’s stock has shown remarkable strength, delivering a 78% return over the past year, with revenue growing at 9.6% in the last twelve months.

Work under this contract is to be primarily conducted at Kratos facilities in Sacramento and at Point Mugu, CA. Steve Fendley, President of Kratos Unmanned Systems Division, emphasized the importance of logistics as an enabler to system readiness and expressed the company’s commitment to delivering the necessary support for the BQM-177A system. For deeper insights into Kratos’s financial health and growth prospects, investors can access comprehensive analysis through InvestingPro, which offers 12+ additional exclusive insights about the company.

Kratos is known for its innovative approach to affordable technology in the defense sector. The company focuses on rapid development and production of solutions that address mission-critical needs and requirements, often partnering with larger traditional system integrators or pursuing contracts as the prime contractor when feasible.

This contract highlights the Navy’s ongoing investment in training and readiness, ensuring that the BQM-177A system is capable of meeting the demands of the Navy’s missions throughout the year.

The information in this article is based on a press release statement from Kratos Defense & Security Solutions, Inc.

In other recent news, Kratos Defense & Security Solutions reported its fourth-quarter 2024 earnings, revealing a slight revenue shortfall but an earnings per share (EPS) that exceeded expectations. The company posted an EPS of $0.13, surpassing the forecasted $0.10, while revenue came in at $283.1 million, slightly below the anticipated $287.58 million. In a strategic move, Kratos announced a joint venture with Rafael, an Israeli defense firm, to produce rocket motors, targeting a market opportunity estimated at $1 billion. This collaboration will expand Kratos’s portfolio, which already includes partnerships for drone jet engines and space systems.

Benchmark analysts maintained a Buy rating on Kratos, with a target price of $38.00, emphasizing the company’s transition into a merchant provider of defense solutions. Meanwhile, Truist Securities identified Kratos as the "Best Play on a Complete Platform that will benefit from AI," citing its partnership with Shield AI to integrate AI pilots on its platforms. Additionally, Kratos’s OpenEdge 2500 digitizer achieved compliance with the Digital IF Interoperability (DIFI) standard, marking a significant milestone in the satellite network equipment industry. These developments underscore Kratos’s strategic focus on advanced defense technologies and partnerships, positioning the company for future growth in the defense sector.

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