Market Pulse57Neutral

Kratos Defense & Security Solutions, Inc.Opportunity Rank #308(KTOS) Intrinsic Value & DCF Analysis (2026)

Sector: Industrials

Current Price

$50.36

Last updated: Jul 15, 2026

Price vs Intrinsic Value

$50.36
Price
$12.85
Intrinsic Value
Overvalued by 74%MOS: $10.28

Fundamental Score

14/100
Bearish

Weighted across 6 signals

Narrative Score

65/100
Improving

No change vs previous

Trend Score

14/100
Weak

As of 2026-07-14

The intrinsic value of Kratos Defense & Security Solutions, Inc. (KTOS) is estimated at $12.85 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $50.36, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 6.02% long-term growth rate and a 10.00% discount rate (calculated: 9.22%), reflecting expected future free cash flow and cost of capital.

The intrinsic value of Kratos Defense & Security Solutions, Inc. (KTOS) is estimated at $12.85 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $50.36, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 6.02% long-term growth rate and a 10.00% discount rate (calculated: 9.22%), reflecting expected future free cash flow and cost of capital.

Valuation Details

$12.85
▼ -74.48% downside
20% margin of safety: $10.28
Years: 10Growth Rate: 6.02%
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Capital Efficiency

Average Quarterly ROIC
0.53%
Cost of Capital (estimated)7%
Value StatusUnderperforming Capital

The company is earning below its required return. This may indicate inefficient use of capital or excess cash that isn't being reinvested.

Complete historical ROIC is available with
.

Fundamental Details

14/100
BearishWeighted across 6 signals
DCF Discount
74.5% premium to price
0
FCF Yield
0.5% trailing FCF yield
0
ROIC vs WACC
ROIC 0.5% vs WACC 7.0% (0.1x)
4
Net Debt / FCF
Net cash position
100
Buybacks
Share count growing
30
FCF CAGR (5Y)
-5.2% 5Y FCF CAGR (adjusted)
0
Strengths: Net Debt / FCF. Concerns: DCF Discount, FCF Yield.

Narrative Details

65/100
Improving
Vs 6-Month Baseline:Average (47th pct)Weighted across 5 recent drivers
Trend: Improving upConfidence: 95%Updated: 13h ago
Sources: 63 (54 News · 9 Analyst)
Drivers(last 30 days)
40 news sentiment+1.1
13 regulatory scrutiny+0.4
Earnings beat-0.1
Analyst upgrades+0.0
8 analyst reiterations0.0

Trend Details

14/100
WeakAs of 2026-07-14309 daily bars used
Distance from 52-Week High-61.5%
6M Relative Strength vs SPY-64.0%
3M Relative Strength vs SPY-41.1%
Price vs 21 EMA35 · -2.4%
Price vs 50 EMA9 · -11.0%
21 EMA vs 50 EMA4 · -8.8%
3M RS vs SPY0 · -41.1%
6M RS vs SPY0 · -64.0%
Distance from 52W High0 · -61.5%

Investment Coach

Updating... 34d ago
AVOIDConfidence: 78%
Thesis
Kratos Defense & Security Solutions, Inc. is significantly overvalued with its current price approximately 75% above the estimated fair value, supported by weak fundamentals and negative returns relative to its cost of capital. Despite a moderately supportive narrative score, the company's financial performance and valuation metrics suggest caution.
Key Risk
The primary risk is the continued deterioration of financial fundamentals and failure to generate returns above the cost of capital, which could further depress the stock price.
Signals To Watch
  • Price moving to at least a mid-teens discount to fair value
  • Improvement in ROIC versus WACC spread
  • Meaningful shifts in the narrative score direction
Ask the Coach - Available with
Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 6.02%5 Year CAGR (Adjusted): -4.40%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$51$53$108$118$20$77$83$56$410$-$3-$18$20$38$70$10$31$8-$5$0$11

How Intrinziq Estimates Fair Value

Intrinziq estimates Kratos Defense & Security Solutions, Inc.'s intrinsic value using a discounted cash flow (DCF) model based on free cash flow trends and a market-based discount rate. The model projects future cash flows over ten years and discounts them using a market return assumption to estimate fair value.

Kratos Defense & Security Solutions, Inc.Industrials

Kratos Defense & Security Solutions, Inc. primarily functions as a contractor for the United States Department of Defense. Its business operations are organized into two distinct divisions: Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment delivers a comprehensive suite of products and services, including advanced microwave electronics, solutions for space and satellite communications, specialized training and cybersecurity/warfare capabilities, C5ISR (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance) and modular systems, cutting-edge turbine technologies, and essential defense and rocket support services. Meanwhile, the Unmanned Systems division is dedicated to developing and supplying autonomous platforms, specifically unmanned aerial, ground, and maritime systems. Kratos caters to an extensive client base, which includes various national security organizations, the DoD, intelligence and classified agencies, international government bodies, and both domestic and global commercial enterprises. The company was established in 1994 and its corporate headquarters are located in San Diego, California.