Kratos Defense & Security Stock Falls After Tepid Q1 Outlook, Retail Clings On To ‘Iron Dome’ Hopes

Kratos Defense & Security Solutions (KTOS) stock fell 4.7% after the bell on Wednesday as the company forecast first-quarter revenue below Wall Street’s estimates.

According to FinChat data, the weapons maker projected first-quarter revenue between $285 million and $295 million, while analysts, on average, expect the company to post $300.2 million in revenue.

Kratos also forecasted 2025 revenue to be between $1.26 billion and $1.29 billion, whose mid-point fell short of Wall Street’s expectations of $1.28 billion.

The military drone maker also projected capital expenditure between $125 million and $135 million as it aims to ramp up production to fulfill its orders.

In January, the company received an order from the Pentagon to develop a test bed to rapidly increase hypersonic flight test capacity. The total value of the contract could reach $1.45 billion.

Kratos reported a net income of $3.9 million, or $0.03 per share, for the fourth quarter ended Dec. 31, compared with $2.4 million, or $0.02 per share.

Its adjusted earnings of $0.13 per share came ahead of Wall Street’s estimated $0.10 per share.

Kratos’ Unmanned Systems (KUS) segment revenues rose to $61.1 million from $55.4 million last year, driven by higher target drone sales.

However, the KUS segment posted an operating loss of $700,000 due to higher material and subcontractor costs.

Kratos’ Government Solutions (KGS) segment revenue rose 1% to $222 million compared with the year-ago quarter.

The company ended the fourth quarter with a book-to-bill ratio of 1.5 to 1, indicating it received more orders than it shipped.

The San Diego-based firm projected 2026 revenue to rise between 13% and 15% compared with 2025’s expected revenue.

Retail sentiment on Stocktwits moved higher into the ‘extremely bullish’ (93/100) territory than a day ago, while retail chatter was ‘extremely high.’

One user was pleased with the decline in share prices and expected the Iron Dome missile defense system initiative in the U.S. to drive growth for the company.

Over the past year, Kratos stock has gained nearly 37%.

Also See: HEICO Stock Gains Aftermarket As Q1 Sales Tops Estimates, Retail Goes Ecstatic

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