Kratos Defense & Security Solutions Inc

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KTOS : NASDAQ : Services
$7.25 -0.15 | -2.0%
Today's Range: 7.22 - 7.54
Avg. Daily Volume: 705200.0
12/09/16 - 3:59 PM ET

Financial Analysis


KRATOS DEFENSE & SECURITY's gross profit margin for the third quarter of its fiscal year 2016 has significantly decreased when compared to the same period a year ago. Even though sales increased, the net income has decreased, representing a decrease to the bottom line. KRATOS DEFENSE & SECURITY has average liquidity. Currently, the Quick Ratio is 1.22 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.

During the same period, stockholders' equity ("net worth") has decreased by 20.76% 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 Q3 FY16 Q3 FY15
Net Sales ($mil)165.4161.7
EBITDA ($mil)-7.27.9
EBIT ($mil)-12.82.0
Net Income ($mil)-23.655.1


Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)21.236.5
Total Assets ($mil)875.9921.5
Total Debt ($mil)445.0448.5
Equity ($mil)204.1257.6


Profitability Q3 FY16 Q3 FY15
Gross Profit Margin16.9926.47
EBITDA Margin-4.354.88
Operating Margin-7.741.24
Sales Turnover0.760.73
Return on Assets-6.872.34
Return on Equity-30.86-11.25
Debt Q3 FY16 Q3 FY15
Current Ratio1.661.66
Debt/Capital0.690.64
Interest Expense8.79.6
Interest Coverage-1.470.21


Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)60.5259.09
Div / share0.00.0
EPS-0.390.07
Book value / share3.374.36
Institutional Own % n/a n/a
Avg Daily Volume674993.0611126.0

Valuation


SELL. This stock’s P/E ratio is negative, making its value useless in the assessment of premium or discount valuation, only displaying that the company has negative earnings per share. To use another comparison, its price-to-book ratio of 2.28 indicates a discount versus the S&P 500 average of 2.82 and a significant discount versus the industry average of 16.03. 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.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
KTOS NM Peers 24.51   KTOS 1.99 Peers 16.38

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.

 

Discount. 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 discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
KTOS 192.25 Peers 20.76   KTOS NA Peers 2.07

Neutral. The absence of a valid price-to-projected earnings ratio happens when a stock can not be valued on the basis of a negative expected future earnings.

KTOS's ratio is negative making this valuation measure meaningless.

 

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KTOS 2.28 Peers 16.03   KTOS -110.00 Peers 162.50

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.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
KTOS 0.70 Peers 1.62   KTOS -1.14 Peers 3.83

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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