Kratos Defense & Security Solutions, valued at $8.4 billion, offers defense and security solutions globally, with segments in government solutions and unmanned systems. The company has seen its stock double in the last year and almost triple in the last three years.

Kratos Defense stock surged after the Pentagon’s focus on drone capabilities, with Defense Secretary Hegseth’s support for domestic drone production. The rapid innovation cycle in drone development and streamlined regulations align with Kratos’ expertise in unmanned systems and defense technology.

In Q1 of 2025, Kratos reported revenue of $302.6 million, above estimates, with strong fundamentals and an opportunity pipeline of $12.6 billion. The company aims for 10% organic revenue growth in 2025 and 13%-15% in 2026, supported by defense spending trends and leadership in hypersonics and unmanned systems.

With 68% of revenues from federal contracts and a strong position in critical defense technologies, analysts expect Kratos to see revenue increase from $1.13 billion in 2024 to $2.20 billion in 2029. The stock, currently at 110x forward earnings, has a potential upside if the multiple normalizes.

Read more at Yahoo Finance: Is Kratos Defense Stock a Buy, Sell, or Hold for July 2025?