New York, May 22, 2026, 07:09 (EDT)
- KTOS traded at $54.72 premarket, up a nickel from Thursday’s $54.67 close.
- Nasdaq will run its usual session Friday. U.S. stock markets are closed Monday for Memorial Day.
- Kratos is seeing faster defense growth, but investors are watching its heavy spending and working-capital demands.
Kratos Defense & Security Solutions (KTOS) was steady at $54.72 in premarket trade Friday, after closing at $54.67 on Thursday. Investors are still figuring out how high a multiple they want to pay for the company’s focus on drones, hypersonics and missile-support systems. Premarket action comes ahead of the regular New York open at 9:30 a.m.
Friday’s the last full Nasdaq session ahead of the Memorial Day break, with U.S. equities shut Monday, May 25. Nasdaq warns that extended-hours trading could see more volatility and thinner liquidity, which means less buying and selling and bigger price moves.
Kratos is drawing more eyes from defense investors. The company isn’t a standard prime contractor, but builds and supplies products for national security, with operations spanning unmanned aircraft, satellite communications, cyber, microwave electronics, missile defense, hypersonics and training systems.
Drone stocks weren’t holding up, either. AeroVironment traded down 0.48% on Investing.com, while Kratos has seen a 52-week range from $34.97 up to $134.00. The range tells the story: the shares still trade with a defense-growth premium, but the market is cooling off.
Kratos’ last major update came with its first-quarter numbers on May 6. Revenue jumped 22.6% to $371 million. Organic growth, which leaves out acquisitions, was 15.8%. Bookings totaled $605.2 million. The book-to-bill ratio landed at 1.6, putting orders 60% ahead of revenue for the quarter.
Kratos lifted its 2026 outlook, now seeing revenue coming in between $1.70 billion and $1.76 billion, with adjusted EBITDA forecast in a range of $170 million to $176 million. The numbers include Orbit Technologies, which Kratos just closed. The company uses adjusted EBITDA to back out interest, taxes, depreciation, amortization, and certain other items. Investors watch this metric, though it differs from net income.
Kratos CEO Eric DeMarco leaned on strong Pentagon demand this quarter, saying “the Department’s demand signals are real” and describing the defense build-up as a “generational recapitalization.” It’s bullish. But traders want to know how soon that demand leads to actual revenue. Kratos Defense & Security Solutions, Inc
Unmanned systems was the fastest grower for Kratos. Revenue there jumped to $82.6 million in the quarter, up from $63.1 million last year, the company said in its 10-Q. Most of the gain came from Valkyrie aircraft production. Valkyrie is Kratos’ tactical drone program that uses jet power.
Kratos said earlier this month it picked Odon, Indiana, for a new arc-jet and laser test site connected to its hypersonic programs. Hypersonic is speeds at Mach 5 or more—five times faster than sound. “This was a highly competitive process,” Michael Johns, senior vice president at Kratos, said in the May 8 release. Kratos Defense & Security Solutions, Inc
Wall Street is still more divided on price than on direction. The Benzinga analyst tracker listed a consensus Buy and a $89.14 target. But calls are all over: Citizens stuck with Market Outperform but trimmed its target to $105, Canaccord left its Buy rating and bumped its target up to $130, and BNP Paribas held at Neutral but shifted its target down to $85.
But the risk is easy to see. Kratos burned through $27.4 million in operating cash in the first quarter. The company’s filing points to supply chain issues, bigger inventories, long-lead materials and higher spending for unmanned systems as the main drags on cash flow. A slip in Pentagon funding, slower production ramps, or capital spending that exceeds orders could undercut the high-growth story.
Friday’s key for KTOS is if shares stay in the mid-$50s range with light volume ahead of the holiday. The bigger test lands after the long weekend. Investors want to see new contracts, budget updates, and signs Kratos can bring backlog through to margin instead of extra costs.
