Kratos Defense & Security Solutions, Inc. (KTOS) Stock Valuation — PE Analysis
Aerospace & Defense · NASDAQ
Current Price
$57.75
PE Ratio (TTM)
347.3x
Intrinsic Value
Outside reliable range
COMPETITIVE MOAT
↑Diversified Defense Portfolio
KTOS is expanding across drones, hypersonics, and satellite systems. This diversification reduces reliance on any single product line, offering resilience.
↑Significant Pipeline Value
A substantial $14.3 billion pipeline indicates strong future revenue potential. This backlog provides visibility and supports ongoing development.
↑Missile Defense Expertise
Recent missile-defense awards highlight KTOS's specialized capabilities. This niche strength is critical in a growing defense market.
INVESTMENT RISKS
↓Government Funding Dependency
Reliance on government contracts and potential shifts in administration policy, like those discussed regarding drone funding, pose a risk. Changes in priorities can impact revenue.
↓Competitive Drone Market
The drone sector is experiencing significant investor interest and potential government funding. Increased competition could pressure margins and market share.
↓Valuation Sensitivity
The broader defense tech surge and IPO market realities, as seen with SpaceX, suggest potential for valuation volatility. High expectations can lead to sharp corrections.
Base case
KTOS base case PE valuation
Base case assumptions: 20.0% annual earnings growth, 50x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the KTOS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Kratos Defense & Security Solutions, Inc. respond.
Open PE Calculator for KTOSCompany Overview
Kratos Defense & Security Solutions, Inc. primarily functions as a contractor for the United States Department of Defense. Its business operations are organized into two distinct divisions: Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment delivers a comprehensive suite of products and services, including advanced microwave electronics, solutions for space and satellite communications, specialized training and cybersecurity/warfare capabilities, C5ISR (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance) and modular systems, cutting-edge turbine technologies, and essential defense and rocket support services. Meanwhile, the Unmanned Systems division is dedicated to developing and supplying autonomous platforms, specifically unmanned aerial, ground, and maritime systems. Kratos caters to an extensive client base, which includes various national security organizations, the DoD, intelligence and classified agencies, international government bodies, and both domestic and global commercial enterprises. The company was established in 1994 and its corporate headquarters are located in San Diego, California.
Financial Metrics — KTOS PE Stock Valuation Data
PE Ratio (TTM)
347.3x
PEG Ratio
11.29
Earnings Yield
0.29%
ROE (TTM)
1.3%
Revenue/Share (TTM)
$8.00
Debt/Equity
0.05x
Frequently Asked Questions
What is the PE ratio of KTOS?
The trailing twelve-month PE ratio of KTOS reflects how much investors pay per dollar of Kratos Defense & Security Solutions, Inc.'s earnings. This metric is most useful when compared to Aerospace & Defense peers and the company's own historical range.
Is KTOS overvalued based on PE ratio?
KTOS's PE of 347.3x combined with a PEG ratio of 11.29 provides a growth-adjusted perspective. A PEG above 2.0 suggests KTOS may be richly valued even accounting for growth. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Aerospace & Defense, a DCF analysis may be more appropriate.
How do I value KTOS stock using PE ratio?
To value Kratos Defense & Security Solutions, Inc. using PE: (1) Compare the current PE (347.3x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (11.29) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of KTOS?
KTOS's PEG ratio is 11.29, calculated by dividing the PE ratio (347.3x) by the expected earnings growth rate. A PEG above 2.0 often signals the stock is priced aggressively relative to its growth trajectory. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for KTOS stock valuation?
PE ratio gives a quick relative read — how KTOS is priced versus Aerospace & Defense peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See KTOS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value KTOS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.