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Kratos Defense & Security Solutions Inc
KTOS : NASDAQ : Services
$4.42 up0.30 | 7.28%
Today's Range: 4.18 - 4.57
Avg. Daily Volume: 407,100
10/05/15 - 4:00 PM ET

Financial Analysis

KRATOS DEFENSE & SECURITY's gross profit margin for the first quarter of its fiscal year 2015 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in revenues underperformed the average competitor within the industry, the net income growth did not. KRATOS DEFENSE & SECURITY has average liquidity. Currently, the Quick Ratio is 1.23 which shows that technically this company has the ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 25.55% from the same quarter last year. Together, the key liquidity measurements indicate that it is relatively unlikely that the company will face financial difficulties in the near future.

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Income Statement Q1 FY15 Q1 FY14
Net Sales ($mil)182.5200.1
EBITDA ($mil)8.013.6
EBIT ($mil)-0.54.0
Net Income ($mil)-16.3-15.0

Balance Sheet Q1 FY15 Q1 FY14
Cash & Equiv. ($mil)36.058.6
Total Assets ($mil)1122.61196.4
Total Debt ($mil)663.0642.0
Equity ($mil)211.5284.1

Profitability Q1 FY15 Q1 FY14
Gross Profit Margin27.427.89
EBITDA Margin4.386.79
Operating Margin-0.272.0
Sales Turnover0.760.75
Return on Assets-7.06-3.5
Return on Equity-37.63-13.51
Debt Q1 FY15 Q1 FY14
Current Ratio1.641.69
Interest Expense12.216.1
Interest Coverage-0.040.25

Share Data Q1 FY15 Q1 FY14
Shares outstanding (mil)58.2757.42
Div / share0.00.0
Book value / share3.634.95
Institutional Own % n/a n/a
Avg Daily Volume468111.0332790.0


SELL. The current P/E ratio is negative, which has no meaningful value in the assessment of premium or discount valuation, it simply displays that the company has negative earnings. To use another comparison, its price-to-book ratio of 1.55 indicates a discount versus the S&P 500 average of 2.80 and a significant discount versus the industry average of 8.08. The price-to-sales ratio is well below both the S&P 500 average and the industry average, indicating a discount. After reviewing these and other key valuation criteria, KRATOS DEFENSE & SECURITY proves to trade at a discount to investment alternatives within the industry.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
KTOS NM Peers 19.74   KTOS 179.39 Peers 14.81

Neutral. The absence of a valid P/E ratio happens when a stock can not be valued on the basis of a negative stream of earnings.

KTOS's P/E is negative making this valuation measure meaningless.


Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

KTOS is trading at a significant premium to its peers.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
KTOS 13.76 Peers 17.88   KTOS NA Peers 3.03

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

KTOS is trading at a significant premium to its peers.


Neutral. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

Ratio not available.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KTOS 1.55 Peers 8.08   KTOS -102.94 Peers 24.88

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

KTOS is trading at a significant discount to its peers.


Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, KTOS is expected to significantly trail its peers on the basis of its earnings growth rate.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
KTOS 0.39 Peers 1.60   KTOS -5.24 Peers 2.41

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

KTOS is trading at a significant discount to its industry on this measurement.


Lower. A sales growth rate that trails the industry implies that a company is losing market share.

KTOS significantly trails its peers on the basis of sales growth



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