Kratos - Valuation Review [Lite] (Sep 2025)

A concise, analyst-style 7-slide review built from our GAAP-based DCF and comparable multiples.

Slides included

• Cover (scope/date/sources)
• Thesis: what the business is, why the current pricing looks rich
• Consensus view: revenue table + quick read of Street trajectory (dated)
• Valuation result: core inputs (discount rate, terminal growth), NPV bridge, equity value/share, implied downside
• Financial outlook: recent & forward revenue path alongside headline multiples
• Market expectations: what today’s valuation is assuming vs. our read of the data
• Summary: verdict, what would change our view, potential downside catalysts

Key assumptions shown

• GAAP basis throughout; we avoid adjusted metrics
• Discount rate: 9%; terminal (maturity) growth: –1%
• Model date and shares outstanding disclosed on slide footers

Why we think the market is ahead of itself (high level)

• USAF’s flagship CCA Increment-1 awards bypassed Kratos; winners were Anduril and GA-ASI, leaving XQ-58 outside the near-term production lane.
• Operating leverage remains limited (low-single-digit GAAP operating margins on ~$1B revenue in 2024).
• Growth in Unmanned has been driven primarily by target drones/test programs; scaling to prime-level production would require capital, supply-chain depth, and customer decisions that are not in hand.

Policy

Educational research only. Not investment advice. 7-day refund if not useful.