Kratos Defense Earnings Surge: Bullish Narratives Amid Premium Valuation

Kratos Defense & Security Solutions (KTOS) has reported a 46.7% profit growth over the past year, exceeding its 5-year average of -34.1%. Analysts forecast 37.38% annual earnings and 13.9% revenue growth, outpacing the broader US market. However, shares trade at a premium compared to industry and peer averages. The company's contract-driven backlog fuels multi-year visibility, but heavy spending delays cash returns, with negative free cash flow of $31.1 million in Q2.