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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Kratos Defense & Security Solutions, Inc    KTOS

KRATOS DEFENSE & SECURITY SOLUTIONS, INC

(KTOS)
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Investors Play Offense With Defense-Focused Stocks

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06/24/2019 | 03:44pm EDT

By Corrie Driebusch

The U.S. may have held off on an airstrike against Iran in favor of sanctions, but U.S. stock investors are decidedly choosing aerospace and defense.

This year, investors have been on the offense when it comes to buying the defense sector's stocks. The SPDR Aerospace & Defense Exchange Traded Fund is up 31% in 2019, twice that of the Utilities Select Sector SPDR Fund.

In the past month, the disparity has been more striking -- the aerospace/defense ETF's gains are three times that of utilities. Thanks to this surge, now the defense stocks have nearly caught up with utilities over the past 12 months after a brutal selloff to close out 2018.

Among the best performers in recent weeks are well-known defense contractors Lockheed Martin Corp. and Northrop Grumman Corp., while smaller Kratos Defense & Security Solutions Inc., which provides technology to the Defense Department, and Axon Enterprise Inc., maker of Tasers and body cameras, have also soared.

Part of the bullishness stems from a bigger budget for national defense. In late May, the Senate Armed Services Committee voted to advance the National Defense Authorization Act for 2020. The committee's markup of the act, which specified dollar amounts, included $750 billion in funding for national defense. One apparent beneficiary was Kratos, according to some analysts, who noted spending that appeared to be related to Kratos' Valkyrie drone.

The belief that the aerospace-and-defense industry stands to benefit from big U.S. government spending has helped the ETF rise even as one of its big components has stumbled. Boeing Co., the largest company in the ETF by market capitalization, has risen in recent weeks, but its May tumble on concerns about the safety of the company's 737 MAX have kept shares at a loss of 1.7% since the end of March.

Meanwhile, utilities stocks, while up in recent weeks as interest rates touch fresh multiyear lows, can't keep up in 2019. The Utilities Select Sector SPDR Fund was little changed in recent trading, while the SPDR S&P Aerospace & Defense ETF rose 0.4%.

Write to Corrie Driebusch at corrie.driebusch@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
AXON ENTERPRISE INC 3.24% 59.22 Delayed Quote.35.36%
BOEING COMPANY (THE) 0.75% 330.45 Delayed Quote.1.71%
BOEING COMPANY (THE) 0.00% 330 Delayed Quote.3.18%
KRATOS DEFENSE & SECURITY SOLUTIONS, INC 5.52% 19.1 Delayed Quote.35.56%
NORTHROP GRUMMAN CORPORATION 0.74% 367.91 Delayed Quote.50.23%
UTILITIES SPDR (ETF) 0.00%End-of-day quote.0.00%
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Latest news on KRATOS DEFENSE & SECURITY
08/09Kratos Receives $4.8 Million in Sole Source Awards for High Performance Jet D..
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07/31Kratos Reports Second Quarter 2019 Financial Results
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Financials (USD)
Sales 2019 730 M
EBIT 2019 43,6 M
Net income 2019 18,2 M
Debt 2019 113 M
Yield 2019 -
P/E ratio 2019 110x
P/E ratio 2020 53,8x
EV / Sales2019 2,93x
EV / Sales2020 2,45x
Capitalization 2 027 M
Chart KRATOS DEFENSE & SECURITY SOLUTIONS, INC
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Kratos Defense & Security Solutions, Inc Technical Analysis Chart | MarketScreener
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Technical analysis trends KRATOS DEFENSE & SECURITY
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 9
Average target price 24,00  $
Last Close Price 19,10  $
Spread / Highest target 46,6%
Spread / Average Target 25,7%
Spread / Lowest Target -11,0%
EPS Revisions
Managers
NameTitle
Eric M. DeMarco President, Chief Executive Officer & Director
William A. Hoglund Chairman
Deanna Hom Lund Chief Financial Officer & Executive Vice President
Phillip D. Carrai President-Technology & Training Solutions
Kevin Walden Chief Information Officer
Sector and Competitors
1st jan.Capitalization (M$)
KRATOS DEFENSE & SECURITY SOLUTIONS, INC35.56%1 920
UNITED TECHNOLOGIES CORPORATION16.21%106 767
LOCKHEED MARTIN CORPORATION43.98%105 464
NORTHROP GRUMMAN CORPORATION50.23%61 795
GENERAL DYNAMICS CORPORATION15.91%52 508
RAYTHEON16.41%49 724