Monday, May 08, 2023
Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) develops and fields transformative, affordable technology, platforms, and systems for United States National Security related customers, allies, and commercial enterprises. Kratos is changing the way breakthrough technologies for these industries are rapidly brought to market through proven commercial and venture capital backed approaches, including proactive research, and streamlined development processes. At Kratos, affordability is a technology, and we specialize in unmanned systems, satellite communications, cyber security/warfare, microwave electronics, missile defense, hypersonic systems, training and combat systems and next generation turbo jet and turbo fan engine development. For more information go to www.kratosdefense.com.
Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
1Q23 Results. Results came in at the high end of guidance. Revenue totaled $231.8 million, up 18.1% y-o-y. Organic growth was 12%. Adjusted EBITDA came in at $17 million, up from $13.8 million in 1Q22. GAAP EPS loss was $0.05 and adjusted EPS net income was $0.06, compared to a net loss of $0.13 and adjusted EPS of $0.04, respectively, a year ago. We had forecasted $220 million, $15.5 million, $(0.03), and $0.07, respectively.
Expanding Opportunity Set. Kratos’ opportunity set continues to expand. As part of the 5-year defense spend plan, the USAF has requested approximately $6 billion reflecting an increased prioritization with it being reported that the Air Force is looking to ultimately procure up to 2,000 drone systems. The Navy has been reported as stating they envision up to 60% of the future Navy Air Wing being comprised of drones.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.