Kratos Defense & Security Solutions, Inc. (KTOS) Stock Valuation — PE Analysis
Aerospace & Defense · NASDAQ
Current Price
$41.82
PE Ratio (TTM)
243.3x
Intrinsic Value
Outside reliable range
COMPETITIVE MOAT
↑Proprietary Technology & IP
Kratos develops specialized technologies in areas like hypersonics and high-energy lasers. This intellectual property creates barriers to entry for competitors.
↑Government Contract Expertise
Deep experience navigating complex government procurement processes and established relationships provide a significant advantage. Winning and executing these contracts builds trust and future opportunities.
↑Scalable Manufacturing for Affordability
Kratos' investment in expanding manufacturing for propulsion and unmanned systems enables cost-effective production. This focus on affordability is a key differentiator in defense spending.
INVESTMENT RISKS
↓Dependence on Key Government Programs
Kratos' revenue is heavily reliant on securing and maintaining contracts with government entities. A cancellation or significant reduction in a major program could severely impact financial performance.
↓Competition from Larger Defense Contractors
While Kratos focuses on affordability, larger, well-established defense companies possess greater resources and broader capabilities. They can leverage scale and existing relationships to compete for contracts.
↓Supply Chain Vulnerabilities
The defense industry relies on complex global supply chains. Disruptions due to geopolitical events, material shortages, or supplier issues could impact Kratos' production and delivery schedules.
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 2026-10-08.
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)
243.3x
PEG Ratio
3.48
Earnings Yield
0.37%
ROE (TTM)
1.1%
Revenue/Share (TTM)
$8.07
Debt/Equity
0.06x
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 243.3x combined with a PEG ratio of 3.48 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. 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 (243.3x) against the Aerospace & Defense median to assess relative pricing, (2) check the PEG ratio (3.48) 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 3.48, calculated by dividing the PE ratio (243.3x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. 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 2026-10-08. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.