Kratos Defense & Security Solutions, Inc.

KTOS

Guided Missiles & Space Vehicles & Parts

Mkt Cap

$3.043B

PE

-5072.13

Debt

$179.4M

Cash

$338.9M

EV

$2.884B

FCF

$30.3M

Market Cap

$3.043B

P/E Ratio

-5072.13

Debt

$179.4M

Cash

$338.9M

EV

$2.884B

FCF

$30.3M

Charts data: {"Earnings":[{"time":"2014-12-27","value":-78000000},{"time":"2015-12-26","value":19800000},{"time":"2016-12-24","value":-60500000},{"time":"2017-12-30","value":-42700000},{"time":"2018-12-29","value":-3500000},{"time":"2019-12-28","value":12500000},{"time":"2020-12-26","value":79400000},{"time":"2021-12-25","value":-2000000},{"time":"2022-12-24","value":-36900000},{"time":"2023-12-30","value":-8900000}],"Sales":[{"time":"2014-12-27","value":868000000},{"time":"2015-12-26","value":657100000},{"time":"2016-12-24","value":668700000},{"time":"2017-12-30","value":751900000},{"time":"2018-12-29","value":618000000},{"time":"2019-12-28","value":717500000},{"time":"2020-12-26","value":747700000},{"time":"2021-12-25","value":811500000},{"time":"2022-12-24","value":898300000},{"time":"2023-12-30","value":1037100000}],"Net Margins":[{"time":"2014-12-27","value":-0.08986175115207373},{"time":"2015-12-26","value":0.030132399939126465},{"time":"2016-12-24","value":-0.09047405413488858},{"time":"2017-12-30","value":-0.05678946668439952},{"time":"2018-12-29","value":-0.0056634304207119745},{"time":"2019-12-28","value":0.017421602787456445},{"time":"2020-12-26","value":0.10619232312424769},{"time":"2021-12-25","value":-0.0024645717806531116},{"time":"2022-12-24","value":-0.0410775910052321},{"time":"2023-12-30","value":-0.008581621830103173}],"Assets":[{"time":"2014-12-27","value":1138800000},{"time":"2015-12-26","value":903300000},{"time":"2016-12-24","value":948600000},{"time":"2017-12-30","value":1024000000},{"time":"2018-12-29","value":1010100000},{"time":"2019-12-28","value":1186000000},{"time":"2020-12-26","value":1562800000},{"time":"2021-12-25","value":1589500000},{"time":"2022-12-24","value":1551500000},{"time":"2023-12-30","value":1632500000}],"Stockholders Equity":[{"time":"2014-12-27","value":224300000},{"time":"2015-12-26","value":254200000},{"time":"2016-12-24","value":276400000},{"time":"2017-12-30","value":511500000},{"time":"2018-12-29","value":519300000},{"time":"2019-12-28","value":574100000},{"time":"2020-12-26","value":925300000},{"time":"2021-12-25","value":945100000},{"time":"2022-12-24","value":936300000},{"time":"2023-12-30","value":976000000}],"ROE":[{"time":"2014-12-27","value":-0.34774855104770397},{"time":"2015-12-26","value":0.07789142407553108},{"time":"2016-12-24","value":-0.21888567293777134},{"time":"2017-12-30","value":-0.08347996089931574},{"time":"2018-12-29","value":-0.006739842095128057},{"time":"2019-12-28","value":0.021773210242118098},{"time":"2020-12-26","value":0.08581000756511402},{"time":"2021-12-25","value":-0.0021161781822029413},{"time":"2022-12-24","value":-0.039410445370073696},{"time":"2023-12-30","value":-0.009118852459016393}],"ROA":[{"time":"2014-12-27","value":0.01747453459782227},{"time":"2015-12-26","value":-0.004981733643307871},{"time":"2016-12-24","value":-0.018553658022348724},{"time":"2017-12-30","value":-0.0056640625},{"time":"2018-12-29","value":0.030195030195030195},{"time":"2019-12-28","value":0.03305227655986509},{"time":"2020-12-26","value":0.019452265165088304},{"time":"2021-12-25","value":0.017552689525007863},{"time":"2022-12-24","value":-0.001675797615211086},{"time":"2023-12-30","value":0.019050535987748852}]}

Kratos Defense & Security Solutions, Inc. operates as a government contractor of the U.S. Department of Defense. The company operates through two segments, Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment offers microwave electronic products, space, satellite and cyber, training solutions, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne and related command, control, and communications system. It serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California.

Sector

10-Q
10/1/23
10-Q
6/25/23
10-Q
3/26/23
10-K
12/25/22
10-Q
9/25/22
10-Q
6/26/22
10-Q
3/27/22
10-K
12/26/21
10-Q
9/26/21
10-Q
6/27/21
10-Q
3/28/21
10-K
12/27/20
10-Q
9/27/20
10-Q
6/28/20
10-Q
3/29/20
10-K
12/29/19
10-Q
9/29/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/30/18
10-Q
9/30/18
10-Q
7/1/18
10-Q
4/1/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Kratos Defense & Security Solutions, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$30.3M	$32.16M	$34.09M	$36.1M	$38.18M	$40.33M	$42.55M	$44.84M	$47.2M	$49.61M	$52.1M	$521M
DCF		$27.97M	$25.78M	$23.74M	$21.83M	$20.05M	$18.4M	$16.86M	$15.43M	$14.1M	$12.88M	$128.8M
Value	$325.8M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 13%

Earnings Stability -71%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been decreasing indicating a lower marginal ROA with respect to the calculated one, this could impede growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	3%	-9%	-5.7%	-0.57%	1.7%	11%	-0.25%	-4.1%	-0.86%	-0.055%
ROA	-0.5%	-1.9%	-0.57%	3%	3.3%	1.9%	1.8%	-0.17%	1.9%	2%
ROE	7.8%	-22%	-8.3%	-0.67%	2.2%	8.6%	-0.21%	-3.9%	-0.91%	-0.046%

What is the average Net Margin?

The average Net Margin over the past 5 years is +1.1%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is -0.85%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +1.96%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is -0.46%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +0.84%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is -0.81%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

The company has high debt with respect to the cashflow it generates.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	-	-	-	-	-	-26.49	-3.52	17.13	5.92
Debt Equity	1.75	1.57	0.58	0.57	0.51	0.33	0.31	0.27	0.22	0.14
MIN
Graham Stability	-	-	-	-	-	-	-6.8%	-120%	-66%	-120%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 5.92.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is 21.81.

What is the Graham’s Stability?

Graham’s Stability measure stands at -1.23.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Data are missing

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	6.5%	11%	12%	15%	3.3%
Net Income	-	-	-	-	-
Stockholders Equity	20%	13%	1.8%	4.2%	-2.9%
FCF	-	-	13%	-	-

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +10.91%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +3.33%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +20.52%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is -.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +13.45%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -2.86%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is -.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -.