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KTOS, Kratos Defense & Security Solutions Inc.

Kratos is a technology, hardware, products, system and software company addressing the defense, national security, and commercial markets.

Kratos makes true internally funded research, development, capital and other investments, to rapidly develop, produce and field relevant solutions that address our customers' mission critical needs and requirements.

Latest annual: FY2025 10-K

KTOS · Kratos Defense & Security Solutions Inc.

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.3B

+18.5% YoY · 12% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.4B 5-yr avg $1.0B

Gross margin 23% 5-yr avg 25%

Operating margin 1.7% 5-yr avg 2.1%

ROIC 1% 5-yr avg 1%

Owner-earnings margin −7% 5-yr avg −2%

Free cash flow margin −9% 5-yr avg −4%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: Revenue is KGS (78%) and US (22%).
What moves the needle: Gross margin has run about 26% and operating margin about 2.6% through the cycle, a solid spread between what it charges and what the product costs to make. The operating margin has swung widely — from −3.3% to 5.3% — on a steadier 26% gross margin, so what moves it sits below the gross line, in operating spend and one-off charges more than in the cost of the product itself. Read this kind of business on the backlog and program execution. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median 2%, above 15% in 0 of 10 years). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

KGS is 78% of revenue, with US the other meaningful segment at 22%.

Revenue by reportable segment, FY2025

KGS78%$1.1B
US22%$292M

By geographyUnited States79%Europe6%Asia Pacific5%Middle East5%Other3%Other North America1%

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$542M	$603M	$618M	$718M	$748M	$812M	$898M	$1.0B	$1.1B	$1.3B	$1.4B	RevenueRevenue
22%	26%	27%	26%	27%	28%	25%	26%	25%	23%	23%	Gross marginGross mgn
21%	21%	19%	18%	19%	20%	20%	19%	19%	18%	18%	SG&A / revenueSG&A/rev
3%	3%	3%	3%	4%	4%	4%	4%	4%	3%	3%	R&D / revenueR&D/rev
($18M)	($12M)	$31M	$38M	$29M	$28M	($3M)	$31M	$29M	$26M	$24M	Operating incomeOp. inc.
−3.3%	−2.0%	4.9%	5.3%	3.9%	3.4%	−0.3%	3.0%	2.6%	1.9%	1.7%	Operating marginOp. mgn
($61M)	($43M)	($4M)	$13M	$80M	($2M)	($37M)	($9M)	$16M	$22M	$29M	Net incomeNet inc.
—	—	—	28%	—	—	—	—	38%	35%	23%	Effective tax rateTax rate
											Cash flow & returns
($15M)	($27M)	$18M	$29M	$45M	$35M	($26M)	$65M	$50M	($42M)	($40M)	Operating cash flowOp. cash
$23M	$22M	$18M	$23M	$25M	$26M	$31M	$33M	$40M	$47M	$54M	DepreciationDeprec.
$18M	($14M)	($4M)	($18M)	($81M)	($14M)	($46M)	$16M	($37M)	($147M)	($165M)	Working capital & otherWC & other
—	—	—	—	$36M	$47M	$45M	$52M	$58M	$95M	$93M	CapexCapex
—	—	—	—	4.8%	5.7%	5.1%	5.1%	5.1%	7.1%	6.5%	Capex / revenueCapex/rev
—	—	—	—	$20M	$10M	($56M)	$32M	$9M	($89M)	($94M)	Owner earningsOwner earn.
—	—	—	—	2.7%	1.2%	−6.3%	3.1%	0.8%	−6.6%	−6.6%	Owner earnings marginOE mgn
—	—	—	—	$9M	($11M)	($71M)	$13M	($9M)	($137M)	($133M)	Free cash flowFCF
—	—	—	—	1.2%	−1.4%	−7.9%	1.2%	−0.7%	−10.2%	−9.4%	Free cash flow marginFCF mgn
$5M	$0	$3M	$18M	$52M	$12M	$132M	$0	$12M	$0	$347M	AcquisitionsAcquis.
-2%	-1%	2%	4%	3%	2%	-0%	2%	1%	1%	1%	ROICROIC
-22%	-8%	-1%	2%	9%	-0%	-4%	-1%	1%	1%	1%	Return on equityROE
−22%	−8%	−1%	2%	9%	−0%	−4%	−1%	1%	1%	1%	Retained to equityRetained/eq
											Balance sheet
$69M	$131M	$183M	$173M	$381M	$349M	$81M	$73M	$329M	$561M	$1.5B	Cash & investmentsCash+inv
$229M	$74M	$65M	$85M	$95M	$94M	$106M	$129M	$118M	$165M	$195M	ReceivablesReceiv.
$57M	$50M	$47M	$61M	$81M	$92M	$126M	$156M	$162M	$188M	$226M	InventoryInvent.
$53M	$35M	$47M	$54M	$55M	$50M	$57M	$63M	$82M	$70M	$112M	Accounts payablePayables
$234M	$89M	$65M	$92M	$121M	$135M	$174M	$222M	$198M	$284M	$308M	Operating working capitalOper. WC
$373M	$471M	$495M	$522M	$765M	$758M	$583M	$594M	$872M	$1.3B	$2.3B	Current assetsCur. assets
$197M	$189M	$165M	$183M	$198M	$221M	$234M	$293M	$297M	$311M	$411M	Current liabilitiesCur. liab.
1.9×	2.5×	3.0×	2.9×	3.9×	3.4×	2.5×	2.0×	2.9×	4.1×	5.6×	Current ratioCurr. ratio
$485M	$426M	$426M	$456M	$484M	$494M	$558M	$569M	$569M	$596M	$884M	GoodwillGoodwill
$949M	$1.0B	$1.0B	$1.2B	$1.6B	$1.6B	$1.6B	$1.6B	$2.0B	$2.5B	$4.0B	Total assetsAssets
$432M	$294M	$294M	$295M	$301M	$297M	$250M	$219M	$175M	$0	$800K	Total debtDebt
$363M	$164M	$112M	$123M	($80M)	($53M)	$169M	$147M	($155M)	($561M)	($1.5B)	Net debt / (cash)Net debt
$276M	$512M	$519M	$574M	$925M	$945M	$936M	$976M	$1.4B	$2.0B	$3.4B	Shareholders’ equityEquity
0.9%	1.3%	1.2%	1.5%	2.8%	3.2%	2.9%	2.4%	2.6%	2.6%	3.0%	Stock comp / revenueSBC/rev
											Per share
92.0M	89.5M	106M	109M	119M	128M	127M	130M	151M	165M	179M	Shares out (diluted)Shares
$5.89	$6.74	$5.82	$6.57	$6.30	$6.34	$7.09	$7.95	$7.53	$8.15	$7.89	Revenue / shareRev/sh
$-0.66	$-0.48	$-0.03	$0.11	$0.67	$-0.02	$-0.29	$-0.07	$0.11	$0.13	$0.16	EPS (diluted)EPS
—	—	—	—	$0.17	$0.07	$-0.44	$0.25	$0.06	$-0.54	$-0.52	Owner earnings / shareOE/sh
—	—	—	—	$0.07	$-0.09	$-0.56	$0.10	$-0.06	$-0.83	$-0.74	Free cash flow / shareFCF/sh
—	—	—	—	$0.30	$0.36	$0.36	$0.40	$0.39	$0.58	$0.52	Cap. spending / shareCapex/sh
$3.01	$5.72	$4.89	$5.26	$7.80	$7.38	$7.39	$7.48	$8.97	$12.08	$19.01	Book value / shareBVPS

Share counts before 2017 are restated ×1.5 for a stock split, so per-share figures sit on one basis.

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+3.7%/yr	+5.3%/yr
EPS	—	−27.6%/yr
Capital spending / share	+13.8%/yr (5-yr)	+13.8%/yr
Book value / share	+16.7%/yr	+9.2%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked. Share counts on the current split basis.

Share count

165Mpeak FY2025

ROIC

1%low FY2016

Gross margin

23%low FY2016

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($89M)owner earningsvs.$22Mnet incomelow FY2025

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2018FY2024

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned ($89M) of owner earnings, the operating cash left after the $47M it takes just to hold its position. It put $48M more into growth; free cash flow, after that spending, was ($137M).

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$22M	$16M	($9M)	($37M)	($2M)
Depreciation & amortizationnon-cash charge added back	+$47M	+$40M	+$33M	+$31M	+$26M
Stock-based compensationreal costnon-cash, but a real cost	+$36M	+$30M	+$25M	+$26M	+$26M
Working capital & othertiming of cash in and out, other non-cash items	−$147M	−$37M	+$16M	−$46M	−$14M
Cash from operations	($42M)	$50M	$65M	($26M)	$35M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$47M	−$40M	−$33M	−$31M	−$26M
Owner earnings	($89M)	$9M	$32M	($56M)	$10M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$48M	−$18M	−$19M	−$15M	−$21M
Free cash flow	($137M)	($9M)	$13M	($71M)	($11M)
Owner-earnings marginowner earnings ÷ revenue	-7%	1%	3%	-6%	1%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $47M, roughly its depreciation, the rate its assets wear out). The other $48M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows. The cash-flow statement also adds stock comp back as non-cash, but it is a real cost paid in shares; counted as the expense it is (less $36M), owner earnings is nearer ($125M).

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$560M

Net cash

Cash $561M − debt $800K

What this means
Cash and short-term investments exceed every dollar of debt by $560M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? 86d

Long (60+ days)

DSO 45 + DIO 66 − DPO 24 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.

Is it a good business?

Return on invested capital 1%

Below average through the cycle

10-yr median, range -2%–4%; 1% latest = NOPAT $17M ÷ invested capital $1.4B

Industry peers: median 14%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 1% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 1%

Thin through the cycle

6-yr median margin, range -7%–3%; latest ($89M) = operating cash ($42M) − maintenance capex $47M

Industry peers: median 4%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -7% of revenue this year, a 1% median across 6 years. It chose to put $48M more into growth, so free cash flow this year was ($137M) — the gap is investment, not weakness. Treating stock comp as the real expense it is (less $36M of SBC) leaves ($125M).
Are earnings backed by cash? -1.91×

Thinly cash-backed

Cash from ops ($42M) ÷ net income $22M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? 2.02×

Expanding

Capex $95M ÷ depreciation $47M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 2 of 5 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.3B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 4.06×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Pass

Debt ≤ working capital · $800K vs $952M WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Miss

A profit every year (10-yr record) · 6 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.05/share (latest year $0.12), the averaged base the calculator's gate runs on, and book value is $10.65/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 4 of 10

What this means
Lost money in 6 year(s), look at what happened there before trusting the average.
Return on capital ≥ 15% 0 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin −0% → 2% (3-yr avg ends)

In the filing’s words The record and the words agree: the margin widened and the filing attributes the gain to its own pricing, not volume alone.

What this means
Through the cycle the operating margin widened — about −0% early to 2% lately, median 3% — pricing power intact or improving.
Reinvestment, incremental ROIC 4%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Worst year 2016 · −3.3% op. margin

What this means
Operations went underwater in 2016, understand why before trusting the good years.
How management talks about it Promotional

What this means
The record is compounding, but the filing leans on a promoter’s vocabulary rather than the per-share, return-on-capital terms an owner uses. The results back the talk here; the register is still worth noting.

Does AI threaten the moat?

Low contestability

The moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“Our success in competing depends, in part, on our ability to remain price- and cost-competitive, respond to changes in customer acquisition strategies and preferences, accurately anticipate our customers' needs, successfully effect our digital transformation strategy and identify, adopt and integrate new digital techno…”

AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat, and the company is using it that way.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 29, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$2.3B

Cash & short-term investments$1.5B
Receivables$195M
Inventory$226M
Other current assets$426M

Current liabilities$411M

Debt due within a year$800K
Accounts payable$112M
Other current liabilities$298M

Current ratio5.63×all current assets ÷ what's due · Graham looked for 2×

Quick ratio5.08×stricter: inventory excluded

Cash ratio3.57×strictest: cash alone against what's due

Working capital$1.9Bthe cushion left after near-term bills

Debt due this year vs. cash$800K due · $1.5B cash covered by cash on hand, no refinancing forced · both figures from the Mar 29, 2026 balance sheet

Cash runway11.0 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Revenue, latest quarter vs. a year ago+22.6%the freshest read on whether the business is still growing

Current ratio, recent quarters3.1× → 5.6×

Deeper floors

Tangible book value$2.3Bequity stripped of goodwill & intangibles

Net current asset value$1.7BGraham's net-net: current assets less all liabilities

Debt incl. operating leases$49M$49M of it operating leases

Deferred revenue$108Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2020–2025

Over the record, the business generated $127M of operating cash; how management split it reads as a reinvestor, most operating cash is plowed back into the business.

Reinvested$334M · 263%

Source of funding−$207M
Reinvestment and shareholder returns ran $207M beyond the operating cash the business generated, so the gap was financed off the balance sheet.
Net change in share count51.1%
The diluted count rose from 119M to 179M: issuance (stock pay, deals) outran any buybacks, so owners were diluted on net.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained−10%
Of the earnings it kept rather than paid out ($70M over the span), annual owner earnings (first three years vs last three) fell $7M, so each retained $1 gave back about 0.10 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$650M26% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equity30%goodwill is this share of book equity; the rest is the company’s own retained and paid-in capital

Cash spent acquiring$234Mover 10 years buying other businesses, against $334M of capital spent building

$24M written down across 1 year (2017): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Eric DeMarco	$9.5M	−$5.8M	$10M
2022	Eric DeMarco	$7.1M	−$6.0M	($56M)
2023	Eric DeMarco	$4.6M	$19.2M	$32M
2024	Eric DeMarco	$7.4M	$11.3M	$9M
2025	Eric DeMarco	$10.8M	$49.7M	($89M)

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership1.5%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.
Stock-based compensation$36M
The slice of the business handed to employees in shares this year, 3% of revenue, equal to 139% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. One trap: the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.

Inverting the record

Invert: instead of why Kratos Defense & Security Solutions Inc. is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 5 tests turned up something to look into; the other 4 came back clean.

Look hereDid the share count rise anyway?51.1%
Diluted shares grew 51.1% over 2020–2025. Owners were diluted on net; each share owns less of the business than it did. Read the buyback line beside this one, not on its own.

And these came back clean

Is it less profitable than it was?
Did debt outgrow the business?
Did receivables and inventory outpace sales?
Are "one-time" charges a yearly habit?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Income taxes as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Aerospace & Defense

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
ATMUAtmus Filtration Technologies Inc.	$1.8B	27%	15.3%	36%	8%
WNCWabash National Corporation	$1.5B	13%	6.4%	14%	4%
THRMGentherm Inc	$1.5B	29%	8.0%	9%	6%
BLBDBlue Bird Corporation	$1.5B	13%	3.9%	53%	4%
FOXFFox Factory	$1.5B	32%	14.1%	18%	8%
KTOSKratos Defense & Security Solutions Inc.	$1.3B	26%	2.8%	2%	1%
RKLBRocket Lab Corporation	$602M	15%	-68.4%	-28%	-59%
RDWRedwire Corporation	$335M	18%	-51.0%	-59%	-22%
Group median	—	22%	5.1%	12%	4%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Kratos Defense & Security Solutions Inc. has delivered.

Kratos Defense & Security Solutions Inc.’s latest year shows negative owner earnings, below the record’s own through-cycle owner earnings. So the tool opens on the through-cycle base, the cash it would earn at rest; clear the toggle below to read the latest year exactly as reported.

Today’s price $

Through the cycle, Kratos Defense & Security Solutions Inc. earns about $14M on its 1.0% median owner-earnings margin. This year’s −6.6% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($14M) Net of stock comp (−$42M) Steady-state · maintenance capex (($87M))

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The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth, delivered—

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow ($133M) on 188M shares outstanding, per the 10-Q cover, as of 2026-05-01; net cash $1.5B. The base opens on the through-cycle figure (the latest year sits off the record’s own median, and Graham’s averaging cuts both ways); clear Normalize to use the year as filed. Net of stock comp treats option pay as the expense it is. Capex ($93M) runs well above depreciation ($54M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about ($87M), the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh KTOS against another business →

The owners of KTOS: the meeting and the votes →

Cite: Owner Scorecard, "Kratos Defense & Security Solutions Inc. (KTOS), the owner's record," https://ownerscorecard.com/c/KTOS, data as of 2026-07-09.

Manual order: ← KTB its page in the Manual KURA →

Industry order: ← KRMN the Aerospace & Defense chapter LHX →