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Kratos reports its latest numbers today, with analysts looking for about 470 million dollars in sales. The company has a long streak of beating these targets, but the focus for long-term owners is less on the quarterly beat and more on how fast it is ramping up production of its Valkyrie drones. We are watching for updates on the plan to build 40 aircraft a year by late 2027. The company has been spending heavily on new factories and parts to reach that goal, which has used up a lot of cash lately. Seeing that spending start to level off while the backlog of 2 billion dollars in orders turns into actual sales would be a sign the business is maturing.
Kratos is scheduled to share its latest quarterly numbers on November 5. Analysts expect the company to report earnings of about 21 cents per share on roughly $470 million in sales.
The main thing to watch is how quickly the company is turning its record $2 billion backlog into actual revenue. Investors will also be looking for updates on drone production targets and whether the heavy spending on new factories is starting to ease, which would help the company bring in more cash than it spends.
Kratos won a $33.6 million contract to design and build the power conversion system for NASA’s Space Reactor-1 Freedom. This spacecraft is part of a project to develop nuclear-powered flight for deep space missions.
While this is a smaller deal compared to the company's multi-billion dollar backlog, it shows Kratos is successfully winning work in high-tech space programs beyond its core drone business. The work will be done as a subcontractor for Sierra Lobo, a firm that manages engineering services for NASA.
Source: GlobeNewsWire
The company is scheduled to share its latest financial results on November 3. Analysts expect earnings of about 21 cents per share, and the business enters the day with a streak of beating expectations for eight quarters in a row. For long-term owners, the focus remains on how quickly the company is turning its large backlog of orders into actual sales. We will also be watching for updates on the Valkyrie drone program, as the company works toward its goal of building 40 of these aircraft every year by late 2027.
Piper Sandler lowered its price target for the stock to $61, down from a previous estimate of $75. This follows a similar move by Goldman Sachs last week, as analysts adjust their expectations for the defense contractor. Even with the lower target, the firm still sees the stock as worth significantly more than its current price of about $38. The average target across all Wall Street analysts now sits at roughly $88, suggesting that most firms still expect the company's drone and satellite business to grow into a much higher valuation over time.
Source: Piper Sandler
Management has beaten its own profit targets for eight straight quarters. This suggests a team that sets conservative bars and consistently outruns its own forecasts.
| Expectation | |
|---|---|
| EPS | $0.21 |
| Revenue | $471M |
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