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Kratos: Bargain-Priced Player In Space Economy, AI, Autonomous Systems Businesses


  • Kratos is well-positioned to benefit from the hypergrowth of the space economy with the advent of Space 2.0.
  • An established company with massive growth potential with a relatively cheap valuation.
  • Likely M&A target for the giants in the aerospace and defense sector which dwarf it.
Kratos headquarters in Silicon Valley
Photo by Sundry Photography/iStock Editorial via Getty Images

Our top pick for the space business is another company with ties to both the aerospace/defense sectors and the space business. Kratos Defense & Security Solutions (NASDAQ:KTOS) is well-positioned to benefit from the hypergrowth of the space economy

This article was written by

HYUNDAI MOTOR SECURITIES Co., Ltd. is the investment banking arm of the Hyundai Motor Group. It is a Korea-based company specialized in the provision of securities and financial services. The Company mainly engages in the securities dealing and brokerage businesses, covering stocks, futures, options, government bonds, corporate bonds, foreign exchanges and financial derivative products. It also engages in the provision of investment consulting services, Internet banking services, corporate financing services, corporate analysis services, as well as operation of trust business.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Hyundai Motor Company is a passive shareholder in our bank.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (8)

Great article!
sts66 profile picture
75% FFP contracts keeps margins down significantly - any delays or setbacks and KTOS picks up the tab - shows up in the Rev/EBITDA ratio, ~10% margin, which is also about what companies make on cost plus contracts. Still think it gets bought out once Skyborg and Valkyrie systems are ready to go - the AF just had it's first test flight of Skyborg using a KTOS Mako drone:

@sts66 thanks for the article link. 130 minute test flight sounds like they gave it a solid workout.
Cracker 1 profile picture
Great article by the way
Cracker 1 profile picture
You can own it here in my opinion. I like the low volume reaction today...nobody wants to sell this name

None of the institutions are going to sell this name for a while they’re all going to sit there because the backlog makes this thing look like a predictable SaaS company and I think it just starts breaking out and heading towards a SaaS-like multiple. The narrative is way too strong and there is a lot of institutional marketing going on in this name and I think this thing just continues higher.
Hopefully this is one to watch for sure.
arok79 profile picture
I am a fan of this company. Bought the stock back in 2016 at the recommendation of a friend who works in the industry. Sold it in 2019 as I thought I had run too far ahead of itself. My mistake was not buying back in in covid crash. At this point I am looking for the stock to come back down to earth a bit further. I like it at $20/share. For now I am not a buyer.
Thanks for that informative article. Might need to add some shares soon.
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