Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) stock fell Friday after the defense tech firm priced a massive $1 billion public offering, sparking dilution concerns amid a 250% surge over the past year.
Kratos Announces 14.3M Share Offering at $84
Kratos has priced an underwritten public offering of 14,285,714 shares of common stock at $84.00 per share. The offering is expected to generate approximately $1.17 billion in net proceeds after underwriting discounts and commissions.
Kratos also granted underwriters a 30-day option to purchase up to an additional 2,142,857 shares. All shares are being sold by the company. The transaction is expected to close on March 2, 2026, subject to customary closing conditions.
Kratos said it intends to use the net proceeds for general corporate purposes, including advancing the development of its defense and security technologies and supporting continued growth initiatives.
Kratos Stock Surges 250.74% Over 12 Months
Over the past 12 months, Kratos’s stock has surged by 250.74%, showcasing significant long-term growth. However, the stock is currently trading below several key moving averages, which could indicate a short-term bearish trend.
Specifically, it is 7.1% below the 20-day SMA, 8.5% below the 50-day SMA, and 1.6% below the 100-day SMA, yet it remains 20.9% above the 200-day SMA, highlighting underlying strength.
The technical indicators present a mixed view. The Relative Strength Index (RSI) is at 46.62, suggesting a neutral market momentum, while the MACD indicates a bearish trend, with the MACD line at -2.2300 below the signal line at -1.6358. This could suggest that while the long-term outlook is strong, there may be short-term volatility.
Kratos EPS Stable; Revenue to Rise to $344.69M
Kratos is slated to provide its next financial update on May 6, 2026. With the earnings date more than two months away, the focus remains on how the recent capital raise will bolster the company’s strategic initiatives.
- EPS Estimate: 12 cents (Stable from 12 cents YoY)
- Revenue Estimate: $344.69 million (Up from $302.60 million YoY)
- Valuation: P/E of 708.8x (Indicates premium valuation)
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $91.47. Recent analyst moves include:
- Canaccord Genuity: Buy (Raises Target to $125.00) (Feb. 24)
- BTIG: Buy (Raises Target to $115.00) (Feb. 24)
- UBS: Initiated with Neutral (Target $79.00) (Feb. 18)
Benzinga Edge Scorecard
Below is the Benzinga Edge scorecard for Kratos Defense & Security Solutions, highlighting its strengths and weaknesses compared to the broader market:
- Value Rank: Weak (Score: 2.46) — Reflects a challenging valuation landscape.
- Quality Rank: Strong (Score: 84.16/100) — Indicates robust operational metrics.
- Momentum Rank: Bullish (Score: 96.83/100) — Stock is outperforming the broader market.
The Verdict: Kratos’ Benzinga Edge signal reveals a mixed investment landscape. While the high Momentum score underscores the stock’s strong performance trend, the low Value score suggests a premium valuation that might limit upside potential.
Kratos Influences Major Defense ETFs
- State Street SPDR S&P Aerospace & Defense ETF (NYSE:XAR): 3.74% Weight
- SPDR S&P Aerospace & Defense ETF (NYSE:XAR): 4.54% Weight
- ARK Autonomous Technology & Robotics ETF (BATS:ARKQ): 8.95% Weight
Significance: Because KTOS carries such a heavy weight in these funds, any significant inflows or outflows will likely trigger automatic buying or selling of the stock.
KTOS Price Action: Kratos Defense & Security shares were down 6.34% at $86.30 during premarket trading on Friday, according to Benzinga Pro data.
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