Kratos Defense & Security Solutions Inc.

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KTOS : NASDAQ : Electronic Technology
$12.65 up 0.04 | 0.32%
Today's Range: 12.53 - 12.92
Avg. Daily Volume: 1679200.0
02/20/18 - 4:00 PM ET

Financial Analysis


KRATOS DEFENSE & SECURITY's gross profit margin for the third quarter of its fiscal year 2017 has significantly increased when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. KRATOS DEFENSE & SECURITY is extremely liquid. Currently, the Quick Ratio is 2.43 which clearly shows the ability to cover any short-term cash needs. The company's liquidity has increased from the same period last year.

At the same time, stockholders' equity ("net worth") has greatly increased by 160.60% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is very unlikely to face financial difficulties in the near future.

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Income Statement Q3 FY17 Q3 FY16
Net Sales ($mil)196.2165.4
EBITDA ($mil)9.2-7.2
EBIT ($mil)3.2-12.8
Net Income ($mil)-4.3-23.6


Balance Sheet Q3 FY17 Q3 FY16
Cash & Equiv. ($mil)239.421.2
Total Assets ($mil)1142.7875.9
Total Debt ($mil)369.7445.0
Equity ($mil)531.9204.1


Profitability Q3 FY17 Q3 FY16
Gross Profit Margin25.9416.99
EBITDA Margin4.68-4.35
Operating Margin1.63-7.74
Sales Turnover0.640.76
Return on Assets-2.17-6.87
Return on Equity-4.64-30.86
Debt Q3 FY17 Q3 FY16
Current Ratio2.861.66
Debt/Capital0.410.69
Interest Expense7.78.7
Interest Coverage0.42-1.47


Share Data Q3 FY17 Q3 FY16
Shares outstanding (mil)103.360.52
Div / share0.00.0
EPS-0.05-0.39
Book value / share5.153.37
Institutional Own % n/a n/a
Avg Daily Volume1739365.02147772.0

Valuation


HOLD. 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 2.39 indicates a discount versus the S&P 500 average of 3.26 and a significant discount versus the industry average of 179.92. The current price-to-sales ratio is well below the S&P 500 average and is also below 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 31.29   KTOS NM Peers 19.18

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.

 

Neutral. 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's P/CF is negative making the measure meaningless.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
KTOS 37.24 Peers 23.31   KTOS NA Peers 5.56

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.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
KTOS 2.39 Peers 179.92   KTOS 69.53 Peers 17.54

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.

 

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

KTOS is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
KTOS 1.73 Peers 2.22   KTOS 10.19 Peers 9.68

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 discount to its industry on this measurement.

 

Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share.

KTOS is keeping pace with its peers on the basis of sales growth.

 

 

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