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Kratos (KTOS) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
People's United (PBCT) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Kratos (KTOS) closed the most recent trading day at $16.03, moving +0.94% from the previous trading session. The stock outpaced the S&P 500's daily gain of 0.47%. At the same time, the Dow added 0.68%, and the tech-heavy Nasdaq gained 0.74%.

Heading into today, shares of the military contractor had gained 14.33% over the past month, lagging the Aerospace sector's gain of 15.95% and outpacing the S&P 500's gain of 7.71% in that time.

Investors will be hoping for strength from KTOS as it approaches its next earnings release. In that report, analysts expect KTOS to post earnings of $0.06 per share. This would mark a year-over-year decline of 33.33%. Meanwhile, our latest consensus estimate is calling for revenue of $188.82 million, down 6.62% from the prior-year quarter.

It is also important to note the recent changes to analyst estimates for KTOS. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. KTOS is holding a Zacks Rank of #2 (Buy) right now.

In terms of valuation, KTOS is currently trading at a Forward P/E ratio of 44.73. This valuation marks a premium compared to its industry's average Forward P/E of 18.97.

Meanwhile, KTOS's PEG ratio is currently 5.96. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Aerospace - Defense Equipment was holding an average PEG ratio of 2.15 at yesterday's closing price.

The Aerospace - Defense Equipment industry is part of the Aerospace sector. This group has a Zacks Industry Rank of 52, putting it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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