Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) secured a major contract modification from the U.S. Navy, further solidifying its position as a critical provider of target drone technology.
$61 Million Modification
The $61.1 million agreement covers the full-rate production of 70 BQM-177A Subsonic Aerial Targets and underscores the company’s expanding influence within the Department of Defense's procurement pipeline.
The BQM-177A serves as the Navy's primary Subsonic Aerial Target (SSAT). These drones replicate the flight characteristics and radar signatures of modern enemy subsonic cruise missiles.
The Kratos tech enables the Navy to conduct testing of surface-to-air missile systems and provides valuable training for fleet personnel using a realistic threat profile.
This specific contract modification, recognized as Lot 6, represents a continuation of the program’s transition into large-scale production.
The company’s recent success extends beyond individual hardware contracts. Kratos is an approved vendor for the Missile Defense Agency's SHIELD program, which has $151 billion in contracts available.
Kratos’ inclusion in this vendor group places it alongside major aerospace and defense entities.
Investors prioritize stability in the aerospace and defense sector, and Kratos has demonstrated an ability to meet the technical requirements of priority military programs.
The combination of consistent contract wins and recognition as a preferred defense vendor has drawn increased attention to KTOS in the financial markets.
The three most recent analyst ratings by Canaccord Genuity, BTIG and UBS have an average price target of $106.33. This implies a 17.52% upside for Kratos, according to Benzinga Pro.
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