Kratos Defense Gets a Buy Rating from Canaccord Genuity


In a report issued on July 6, Kenneth Herbert from Canaccord Genuity maintained a Buy rating on Kratos Defense (NASDAQ: KTOS), with a price target of $15. The company’s shares opened today at $11.97.

Herbert noted:

“We believe the SSAT is contributing ~$40M to 2018 revenues, and at full rate production in 2021 it can contribute $80M-$100M in annual revenues. At full rate production, we believe the SSAT will be the largest single program for the company (assuming no near-term surge for the Valkyrie or the Gremlins) and supports our thesis that the legacy target drone business will grow from ~$150M in 2018 to almost $250M in 2020-2021. We believe that the SSAT and AFSAT programs are accretive to the Unmanned Systems segment operating profit and will contribute to the positive FCF inflection.”

According to TipRanks.com, Herbert is a 5-star analyst with an average return of 12.4% and a 65.2% success rate. Herbert covers the Consumer Goods sector, focusing on stocks such as Transdigm Group Inc, CPI Aerostructures, and Spirit AeroSystems.

The word on The Street in general, suggests a Strong Buy analyst consensus rating for Kratos Defense with a $15.33 average price target.

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Based on Kratos Defense’s latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $143 million and GAAP net loss of $2.2 million. In comparison, last year the company had a GAAP net loss of $6.2 million.

Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of KTOS in relation to earlier this year.

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Kratos Defense & Security Solutions, Inc. engages in the provision of technology systems to the U.S. Department of Defense. It operates through the following segments: Kratos Government Solutions, Unmanned Systems, and Public Safety & Security.

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