Kratos (KTOS) shares ended the last trading session 13.8% higher at $104.04. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 18.9% gain over the past four weeks.
Recently, U.S. President Donald Trump proposed increasing military spending to $1.5 trillion for 2027, compared with the $901 billion defense budget approved for 2026, subject to authorization. The proposal strengthened expectations of sustained defense spending, improving funding visibility for defense companies and supporting positive investor sentiment across the sector.
On Jan. 8, 2026, Kratos Defense & Security Solutions, Inc. announced that Northrop Grumman was awarded the U.S. Marine Corps’ Marine Air-Ground Task Force Uncrewed Expeditionary Tactical Aircraft Collaborative Combat Aircraft program, which includes Kratos’ Valkyrie uncrewed aerial system. The award highlights Kratos’ role in uncrewed and autonomous combat systems, supporting its long-term growth outlook and boosting investor confidence in the stock.
This military contractor is expected to post quarterly earnings of $0.14 per share in its upcoming report, which represents a year-over-year change of +7.7%. Revenues are expected to be $328.72 million, up 16.1% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Kratos, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on KTOS going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Kratos is part of the Zacks Aerospace - Defense Equipment industry. Leonardo DRS, Inc. (DRS), another stock in the same industry, closed the last trading session 4.4% higher at $38.84. DRS has returned 9.4% in the past month.
Leonardo DRS, Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.37. Compared to the company's year-ago EPS, this represents a change of -2.6%. Leonardo DRS, Inc. currently boasts a Zacks Rank of #4 (Sell).
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Kratos Defense & Security Solutions, Inc. (KTOS): Free Stock Analysis Report Leonardo DRS, Inc. (DRS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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