TJ
Stock/Options Trader, Volume at Support/Resistance, Publisher of Volume Stocks Newsletter
Kratos is becoming the government's default answer for drones, counter-drone, space sensors and hypersonics at once, landing contracts every few days. Over about a week and a half it won roughly $100M sole-source to move a Space Domain Awareness sensor program into production, about $400M in funding tied to hypersonics and other programs, and a $156M sole-source NNSA counter-drone IDIQ, over $650M in all. It also opened a new 167,000 sq ft Pennsylvania plant to keep up with demand. x.com
Kratos keeps winning in the growing air-defense and counter-drone market as demand surges for affordable, rapidly produced military hardware. It landed a roughly $36M sole-source contract for a new air-defense missile system, which Tom Mills, president of its C5ISR division, called a clear differentiating capability. The win validates its strategy in hypersonics, drones and missile defense, the volume was undeniable and this is just the beginning, with the 200 level near $69 the next target. x.com x.com
Kratos is the most ambitious 10x case because defense spending is shifting toward drones, autonomous aircraft, hypersonics, propulsion and cheaper systems built at scale, areas it has spent years preparing for. It has a roughly $15 billion bid pipeline against under $2 billion of annual revenue. If even a few programs reach large-scale production, the company could look completely different in 10 years. x.com
Kratos keeps winning orders because it undercuts defense primes like Lockheed Martin and Raytheon by mass-producing low-cost, rapidly built systems. In early September it won a $20M+ satellite-communications gateway and antenna contract from an Asian defense customer, plus a roughly $35M award for hypersonic, counter-drone and air-defense hardware. Its Spartan engines will power Boeing's JDAM-LR munitions, with mass production from 2027. Q2 revenue rose over 30%, and backlog is $2.08B. x.com
Kratos's capital-intensive business has weak financial support for the investment it requires. Its 23% gross margin is unimpressive, and operating profitability is extremely thin. x.com
Kratos executes very well, and its stock looks to be at a decent level after a contract worth up to $446.8M. The deal covers ground infrastructure and operations to launch and run Epochs 1 and 2 of the Space Force's medium-Earth-orbit missile warning and tracking satellites, designed to track hypersonic missiles as well as ICBMs. Kratos is broadening its hypersonic and satellite products, mostly as prime contractor and integrator, and is in transition toward becoming a bigger company. x.com … Show more
Kratos and Kraken Robotics are falling on sector macro, not business decline, so a strong year-end close looks likely. Both hit 52-week lows, down 68% and 64% from this year's highs. Per Bernstein, peace headlines and a stalled US budget put defense at a 12% discount to the S&P, but it expects the 2027 budget to rise over 10%. Raymond James notes tax-loss selling hits YTD losers into mid-October, and they often lead the rebound. Kratos has a record $2.08B backlog; Kraken guides $290-320M. x.com
Kratos looks expensive against its earnings, trading at about 49x versus the usual 24x for aerospace and defense suppliers. At 24x next year's $1.13 EPS, give or take 12%, fair value sits around $23.92-$30.45, so the $54.96 price is 81% above fair. This is a valuation read off reported earnings and estimates only, with no fundamental work. x.com
Kratos' Taiwan drone production opportunity has advanced as its joint Chien Feng IV cleared every flight-test benchmark, per TaiwanMonitor. NCSIST and Kratos plan phased localization up to domestic mass production, subject to U.S. government approval. x.com
These five defense autonomy companies can each 10x on fast-growing drone, unmanned and counter-drone businesses. Kraken Robotics makes subsea drones, batteries and sonar for autonomous underwater warfare. Ondas grew TTM revenue 979% to $174M and guides 2026 to $525M-$550M. Kratos has a $2B backlog in unmanned systems, hypersonics and missile defense. AeroVironment grew TTM revenue 84% to $2.0B on military drones, and Red Cat grew 867% with a 2026 target of $150M-$180M. x.com
Kratos Defense earns too little to justify its executive pay, with first-half 2026 operating income strikingly low for an entire defense company. Its CEO's 2026 pay totals $10.8 million: $1 million in salary, $8 million in stock, a $1.5 million cash incentive and $88,000 in perks. x.com
Drone stocks fell in 2026 even as backlogs hit records: Ukraine turned aircraft into ammunition, and the Pentagon's 2027 request holds nearly $75B for drones and counter-drone. AeroVironment's reordered loitering munitions and Kratos's jet drones are highest conviction. Counter-drone names Ondas, Axon, Motorola Solutions, Safe Pro, DroneShield and Rheinmetall gain as threats grow, Unusual Machines from Chinese-parts bans. Primes bury drone exposure; pure plays may not convert backlog. x.com … Show more
