Kratos Defense Stock: A Dip in Opportunity or Overvaluation?

Kratos Defense and Security Solutions (NASDAQ: KTOS) has delivered a 200% return in 2025, outpacing the iShares U.S. Aerospace & Defense ETF's 46% return. However, after a sharp drop following Q3 2025 earnings, investors are wondering if the stock remains a buy. Kratos reported a 26% YoY revenue increase, beating analyst expectations, and raised its full-year 2025 organic revenue growth guidance to 14%-15%. The company also raised its 2026 and 2027 guidance, projecting 15%-20% and 18%-23% organic growth, respectively.