Kratos Surges Ahead in Defense With Advanced Propulsion Initiatives

Kratos Defense & Security Solutions, Inc. KTOS is accelerating its progress in the defense industry through robust investments and partnerships in advanced propulsion programs. As nations across the globe are rapidly enhancing their defense spending amid growing hostility worldwide, the demand for combat jets, both manned and unmanned, along with missiles, is rising exponentially, giving a steady boost to the demand for advanced propulsion systems.

In its latest attempt to benefit from this growth trend, Kratos joined hands with GE Aerospace, a well-known manufacturer of aircraft engines, in June 2025, to advance propulsion technologies for the next generation of affordable unmanned aerial systems and Collaborative Combat Aircraft-type (CCA-type) aircraft.

Following this announcement, the two companies declared that they will be opening a new 50,000-square-foot manufacturing facility in Bristow, OK. This facility, projected to be expanded to 100,000 square feet, will be ultimately used to manufacture up to five lines of the GEK (GE Aerospace-Kratos) family of turbojet engines, with the initial focus on the GEK800 product lines.
 
No doubt this facility, once fully operational as expected by 2026-end, should play a critical role in strengthening Kratos’ position in the propulsion market for the defense industry, with the U.S. Air Force and the Department of Defense expressing growing interest in using uncrewed CCAs in recent times.

Industry Peers With Strong Focus on Defense Propulsion Systems

Like Kratos, other defense stocks like RTX Corporation RTX and Rolls-Royce Holdings plc RYCEY, involved in propulsion systems, are also making notable progress.

RTX’s Pratt & Whitney segment continues to strengthen its propulsion portfolio with new defense contracts. Notably, in June 2025, Pratt & Whitney secured a contract from Dynetics to supply its proven propulsion system, TJ150 engines, for integration with the latter’s Small Cruise Missile, known as Black Arrow.

Rolls-Royce’s Defense unit develops and delivers complex propulsion solutions for safety-critical applications in the air, at sea and on land. The company is set to power the U.S. Navy's MQ-25 unmanned refueling aircraft with its AE 3007N engine and thereby expand its leadership in unmanned propulsion.

KTOS’s Price Performance, Valuation and Estimates

Shares of KTOS have gained 186.8% in the past year compared with the industry’s 34.2% growth.

The company shares are trading at a discount, with its forward 12-month Price/Sales being 7.60X compared with its industry’s average of 10.29X.

The Zacks Consensus Estimate for KTOS’ 2026 earnings has improved over the past 60 days. The same for its 2025 earnings has remained constant over the past 60 days.

KTOS stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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