Canaccord Genuity Believes Kratos Defense (NASDAQ: KTOS) Won’t Stop Here

By Austin Angelo

Canaccord Genuity analyst Kenneth Herbert reiterated a Buy rating on Kratos Defense (NASDAQ: KTOS) today and set a price target of $14. The company’s shares opened today at $11.19, close to its 52-week high of $11.47.

Herbert observed:

“We spent two days on the road with management of Kratos Defense & Security (KTOS). We are incrementally more confident in near-term upside to the base business due to expected funding increases in the FY18 defense budget, improving visibility on near-term contract awards, and anticipated demand growth for core offerings in satellite communications, unmanned systems, microwave electronics, and training systems. Moreover, potential portfolio adjustments, debt refinancing, and new program opportunities will all be positive catalysts. We expect the company to raise its full-year 2017 guidance as part of its Q2/17 results.”

According to TipRanks.com, Herbert is a 5-star analyst with an average return of 10.0% and a 61.3% success rate. Herbert covers the Industrial Goods sector, focusing on stocks such as Transdigm Group Inc, CPI Aerostructures, and Spirit AeroSystems.

Kratos Defense has an analyst consensus of Moderate Buy, with a price target consensus of $11.63.

Based on Kratos Defense’s latest earnings report for the quarter ending March 31, the company posted quarterly revenue of $168 million and GAAP net loss of $10 million. In comparison, last year the company earned revenue of $153 million and had a GAAP net loss of $22.2 million.

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Kratos Defense & Security Solutions, Inc. provides mission critical products, services and solutions for United States national security priorities. It operates through the following segments: Kratos Government Solutions, Unmanned Systems, and Public Safety & Security. The Kratos Government Solutions segment includes microwave electronic products, satellite communications, modular systems and rocket support operating. The Unmanned Systems segment consists of unmanned aerial system and unmanned ground and seaborne system businesses. The Public Safety & Security segment provides independent integrated solutions for advanced homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications. The company was founded on December 19, 1994 and is headquartered in San Diego, CA.