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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Kratos Defense & Security Solutions, Inc. (XNAS:KTOS) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
KTOS
Name:
KRATOS DEFENSE & SECURITY SOLUTIONS, INC. (XNAS:KTOS)
Sector:
- 18700.00K
Industry:
Aerospace & Defense
CEO:
Mr. Eric DeMarco
Total Employees:
3,300
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -427.99% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF KRATOS DEFENSE & SECURITY SOLUTIONS, INC.(KTOS) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND AEROSPACE & DEFENSE INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
12.12
One Month Price Target:
$12.18
Six Month Price Target :
$12.45
Likely Price in One Year's Time:
Ticker:
$12.78
Likely Trading Range Today Under (Normal Volatility)
$12.05
Price Upper limit ($) :
$12.19
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$11.26
This week:
$10.2
This month :
$8.27
Other Primary facts
Market Cap:
1.50B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
125.94M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
21.74%
-22.32%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$16.12
$14.30
$8.12
$9.94
Medium risk (<10%) entry points
Buy Call
Sell Call
$13.71
Buy Put:
Sell Put:
$13.32
$10.53
$10.92
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
KTOS
Sharpe Ratio:
-0.22%
Comparison:
KTOS, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is -120.67% lower than the industry
& is -109.84% lower than the market/S&P 500 average
Average Returns/Yield of
KTOS
Daily returns:
0.00%
Weekly returns:
0.01%
Monthly returns:
0.02%
Yearly returns:
10.44%
Comparison of returns:
Average annual returns/yield (last 3 years) is -97.49% below industry average
Classification:
KTOS, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
KTOS has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.46%
Weekly Volatility:
7.73%
Monthly Volatility:
15.46%
Yearly Volatility:
53.57%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.33%
Volatility in last five trading days has been -90.42% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.10%
Weekly VaR:
-15.88%
Monthly VaR:
-31.76%
How Much Can the price of
KTOS
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-28%
Worst case (decline):
>85%
This translates to price declining to:
$8.72
This translates to price declining to:
$1.82
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
KTOS is a 124.13% riskier investment compared to the market/S&P 500 & is 92.01% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 9.51% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
KTOS
Beta in relation to market/S&P 500--0.81
Expected beta in 1 year's time:
0.714
Expected beta in 3 year's time:
1.009
Unlevered (debt free) Beta:
0.578
Beta in relation to Nasdaq (XNAS):
1.011
Beta in relation to all global stocks::
0.903
Beta Comparison & Analysis
Beta of competitors/peers::
1.211
Beta is -32.84% lower than peers
Average Industry Beta:
1.007
Beta is -19.25% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
8.44%
Sustainable growth rate is -57.67% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.085
Alpha is -2242.97% below industry average alpha yield
Alpha is -538% below the market average
Analysis of Cost of Capital of
KTOS
Equity cost of capital:
0.087
Equity cost of capital is -13.21% below industry mean WACC
Unlevered (without debt) cost of capital:
6.20%
Before-tax cost of debt:
7.00%
After-tax cost of debt:
5.53%
Overall debt rating:
-
Weighted average cost of capital (WACC):
5.53%
WACC is 0.94% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$6.46
Revenue growth rate per share of (3Y):
1.61
Annual revenue growth rate is -89.63% below industry average
EPS:
-$0.16
Expected Annual growth rate of EPS (3Y):
0.00%
-
Free cash flow (FCF) per share:
-
-
-
Debt per share
$2.61
EBITDA per share
$0.33
Valuation Analysis Today of
KTOS
P/E Ratio:
81210.52
P/E Ratio of Competitors/Peers:
45.94
P/E ratio is 176675.63% higher than main peers & is 172716.06% higher than the industry
-
KTOS is -261.20% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
1.88
Price to sales ratio is -80.27% below the industry mean
P/B (Price to book value ratio):
1.61
-
-
Net income growth rate (3Y):
-52.51%
Net income growth rate is -1834.46% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
35.21%
Net debt to equity ratio:
9.05%
Debt to assets ratio:
20.97%
Net debt to assets ratio:
5.39%
Debt-to-asset ratio is -60.92% below industry average
Ability to repay debt:
Interest coverage ratio:
1.77
Interest coverage ratio is -78.69% less than industry average
Looking forward:
Debt growth rate:
-2.58%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 48.57%
Analysis of Key Statistics
Correlation of price movement with the market:
0.558
Statistical significance of correlation:
KTOS has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.541
Stock price is 3.07% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.541
Correlation of price movement with Nasdaq (^IXIC):
-0.023
Covariance of price movement with the market:
-0.047
Kurtosis
8.487
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.052
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
KTOS
Gross Profit Margin Ratio:
111%
Operating Profit Margin Ratio:
2.68%
Operating profit margin is -100.54% lower than the industry
Net Profit Margin Ratio:
111%
Effective Tax Rate:
-15.54%
Effective tax rate is -165.49% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-2.12%
Return on equity (ROE) is -126.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-1.26%
Return on assets (ROA) is -129.62% lower than the industry
Financial Leverage:
1.3x
Current Ratio:
3.23
Current ratio is 1.86% above industry average
Cash Conversion Cycle (days):
96.7
Cash conversion cycle is -83.22% below industry average
The remaining useful life of property plant & equipment is: 5.2 years
Stock based compensation to net income ratio:
-35.35%
In-depth Efficiency Analysis
Revenue generated per employee:
246.5K
Each employee generates -28% less revenue than industry average revenue per employee
EBITDA generated per employee:
12.7K
Each employee generates -66% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 6.0K
Each employee generates -193% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 5.7K
Each employee generates 144% more free cash flow than industry average revenue per employee
Assets/Capital per employee
265.9K
Each employee generates 144% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- 30.37%
Growth rate in R&D investment/expenditure is -17580.45% lower than the industry
Competitors/Peer firms of
KTOS
STAR BULK CARRIERS CORP. (XNAS:SBLK)
MLHR
HEADHUNTER GROUP PLC (XNAS:HHR)
VERRA MOBILITY CORPORATION (XNAS:VRRM)
CRYOPORT, INC. (XNAS:CYRX)
Latham Group Inc (XNAS:SWIM)
GRID DYNAMICS HOLDINGS, INC. (XNAS:GDYN)
Raven Property Group Limited (MISX:RAVN)
GIBRALTAR INDUSTRIES, INC. (XNAS:ROCK)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�8%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
813.50M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
587.50M
226.00M
36.40M
-
165.60M
-
-
202.00M
-
23.70M
35.80M
42.00M
21.80M
- 19800.00K
- 14800.00K
2.30M
- 19800.00K
Statement of Cash Flow
Date:
Period:
9.60M
Differed Income Tax :
-
Stock Based Compensation :
7.00M
Change in Working Capital :
- 22100.00K
Accounts Receivables:
31.90M
Other Working Capital:
- 7600.00K
Other Non-Cash Items:
13.30M
Net Cash Provided by Operating Activities:
- 7900.00K
Investments in PP&E:
-
Net Acquisitions:
- 58500.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
254.40M
-
254.40M
280.70M
107.10M
45.70M
687.90M
213.10M
522.90M
51.50M
-
-
90.10M
877.60M
-
1.57B
51.70M
10.50M
-
49.70M
101.40M
213.30M
328.30M
76.40M
404.70M
-
618.00M
-
- 650300.00K
600.0K
-
March 31, 2022 at 6:00:00 AM
789.50M
932.30M
1.55B
-
338.80M
84.4M
-
- 10700.00K
- 69200.00K
- 310100.00K
-
-
-
292.90M
- 17200.00K
- 700.00K
- 95000.00K
254.40M
349.40M
- 7900.00K
- 10800.00K
- 18700.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
KTOS
2023
2024
2025
2026
2027
$12.82
$13.52
$14.26
$15.04
$15.86