Kratos Defense & Security Solutions, Inc. (KTOS): a likely value trap?

Avoid — even after a 65% crash from its highs, KTOS still trades at ~270x earnings while burning cash, so it's not actually cheap.

⚠ TRAP Fundamentals50/100

Down 65% from its all-time high of $130.72 — now $46.03

Why KTOS dropped

The stock fell mostly due to a broad "sell the high-flying defense/drone names" rotation and profit-taking after a huge prior run-up (from ~$130 to ~$46), not because of a specific earnings miss — actual results have been beating estimates and guidance has been raised, but valuation was priced for perfection and is normalizing.

Fwd P/E 42.2Op margin 1.8%Rev growth 22.6%Debt/equity 5.4%Analyst upside 137.5%

How this scored 50/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 2.1%

✅ Generates cash Free cash flow $-107M

✅ Not drowning in debt Debt/equity 5.4% (limit 200%)

✅ Can pay its bills Current ratio 5.6 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 1/25

Operating margin 1.8% 1/9

Net profit margin 2.1% 1/8

Return on equity 1.2% 0/8

Growth Is it getting bigger, or dying? 24/25

Revenue growth 22.6% 8/9

Earnings growth 130.6% 8/8

Expected profit change 541.9% 8/8

Value Is it cheap right now? 7/25

Forward P/E 42.2 0/10

PEG ratio 36.4 0/8

Analyst target upside 137.5% 7/7

Balance sheet Will it survive? 18/25

Debt / equity 5.4% 10/10

Current ratio 5.6 8/8

Free cash flow $-107M 0/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-07-20. Research only — not financial advice.