Market Pulse50Neutral

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

Sector: Industrials

Current Price

$83.69

Last updated: Mar 24, 2026

Price vs Intrinsic Value

$83.69
Price
$8.44
Intrinsic Value
Overvalued by 90%MOS: $6.75

Fundamental Score

14/100
Bearish

Weighted across 6 signals

Narrative Score

77/100
Strong

No change vs previous

The intrinsic value of Kratos Defense & Security Solutions, Inc. (KTOS) is estimated at $8.44 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $83.69, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 6.03% long-term growth rate and a 9.44% discount rate, reflecting expected future free cash flow and cost of capital.

The intrinsic value of Kratos Defense & Security Solutions, Inc. (KTOS) is estimated at $8.44 per share based on a 10-year discounted cash flow (DCF) analysis. At the current price of $83.69, the stock appears overvalued relative to its projected cash flow fundamentals. This estimate assumes a 6.03% long-term growth rate and a 9.44% discount rate, reflecting expected future free cash flow and cost of capital.

Valuation Details

$8.44
▼ -89.92% downside
20% margin of safety: $6.75
Years: 10Growth Rate: 6.03%
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Capital Efficiency

Average Quarterly ROIC
0.4%
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
89.9% premium to price
0
FCF Yield
0.3% trailing FCF yield
0
ROIC vs WACC
ROIC 0.4% vs WACC 7.0% (0.1x)
3
Net Debt / FCF
Net cash position
100
Buybacks
Share count growing
30
FCF CAGR (5Y)
-4.7% 5Y FCF CAGR (adjusted)
0
Strengths: Net Debt / FCF. Concerns: DCF Discount, FCF Yield.

Narrative Details

77/100
Strong
Weighted across 5 recent drivers
Trend: StableConfidence: 91%Updated: 39m ago
Sources: 103 (96 News · 7 Analyst)
Drivers(last 30 days)
44 regulatory scrutiny+1.4
50 news sentiment+0.8
Upgrade headlines+0.6
Earnings beat+0.0
7 analyst reiterations0.0

Investment Coach

Updated 16h ago
AVOIDConfidence: 84%
Thesis
Kratos Defense & Security Solutions, Inc. (KTOS) is significantly overvalued with a current price nearly 90% above its estimated fair value, supported by weak fundamentals and minimal free cash flow yield. The company's returns are trailing its cost of capital, indicating poor capital efficiency and growth prospects.
Key Risk
The primary risk is the company's sustained inability to generate returns above its cost of capital, which could further depress valuation and investor confidence.
Signals To Watch
  • Price movement to at least a mid-teens discount to fair value.
  • Improvement in ROIC versus WACC spread for sustained profitability.
  • Emergence of fresh narrative or sentiment coverage to support valuation.
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Historical Growth Rates
Free Cash Flow- - -Trend CAGR: 6.03%5 Year CAGR (Adjusted): -3.97%

Free Cash Flow (in millions)

TTM20252024202320222021202020192018201720162015201420132012201120102009200820072006
$53$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. operates as a government contractor of the U.S. Department of Defense. The company operates through two segments, Kratos Government Solutions and Unmanned Systems. The Kratos Government Solutions segment offers microwave electronic products, space and satellite communications, training and cybersecurity/ warfare, C5ISR/ modular systems, turbine technologies, and defense and rocket support services. The Unmanned Systems segment provides unmanned aerial systems, and unmanned ground and seaborne systems. It serves national security related agencies, the department of defense, intelligence agencies, and classified agencies, as well as international government agencies and domestic and international commercial customers. Kratos Defense & Security Solutions, Inc. was incorporated in 1994 and is headquartered in San Diego, California.