Overall KTOS gets a fundamental rating of 4 out of 10. We evaluated KTOS against 73 industry peers in the Aerospace & Defense industry. The financial health of KTOS is average, but there are quite some concerns on its profitability. KTOS is valued quite expensive, but it does show an excellent growth.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

KTOS had positive earnings in the past year.
In the past year KTOS has reported a negative cash flow from operations.
In multiple years KTOS reported negative net income over the last 5 years.
Of the past 5 years KTOS 4 years had a positive operating cash flow.

1.2 Ratios

The Return On Assets of KTOS (0.83%) is comparable to the rest of the industry.
KTOS has a Return On Equity (1.01%) which is comparable to the rest of the industry.
KTOS has a Return On Invested Capital (0.90%) which is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for KTOS is significantly below the industry average of 8.56%.

		Industry Rank	Sector Rank
ROA	0.83%
ROE	1.01%
ROIC	0.9%

ROA(3y)-0.7%

ROA(5y)0.58%

ROE(3y)-1.22%

ROE(5y)0.95%

ROIC(3y)1.26%

ROIC(5y)1.46%

1.3 Margins

KTOS's Profit Margin of 1.56% is in line compared to the rest of the industry. KTOS outperforms 47.95% of its industry peers.
In the last couple of years the Profit Margin of KTOS has declined.
KTOS has a Operating Margin (1.89%) which is comparable to the rest of the industry.
KTOS's Operating Margin has declined in the last couple of years.
The Gross Margin of KTOS (22.91%) is comparable to the rest of the industry.
KTOS's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	1.89%
PM (TTM)	1.56%
GM	22.91%

OM growth 3Y-7.51%

OM growth 5Y-12.8%

PM growth 3YN/A

PM growth 5Y-3.81%

GM growth 3Y-3.05%

GM growth 5Y-0.93%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so KTOS is destroying value.
The number of shares outstanding for KTOS has been increased compared to 1 year ago.
Compared to 5 years ago, KTOS has more shares outstanding
KTOS has a better debt/assets ratio than last year.

2.2 Solvency

An Altman-Z score of 26.76 indicates that KTOS is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 26.76, KTOS belongs to the top of the industry, outperforming 94.52% of the companies in the same industry.
KTOS has a Debt/Equity ratio of 0.04. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.04, KTOS belongs to the top of the industry, outperforming 84.93% of the companies in the same industry.

		Industry Rank	Sector Rank
Debt/Equity	0.04
Debt/FCF	N/A
Altman-Z	26.76

ROIC/WACC0.09

WACC9.84%

2.3 Liquidity

KTOS has a Current Ratio of 4.30. This indicates that KTOS is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of KTOS (4.30) is better than 75.34% of its industry peers.
KTOS has a Quick Ratio of 3.68. This indicates that KTOS is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 3.68, KTOS belongs to the best of the industry, outperforming 82.19% of the companies in the same industry.

		Industry Rank	Sector Rank
Current Ratio	4.3
Quick Ratio	3.68

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

KTOS shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.17%.
The Earnings Per Share has been growing slightly by 7.58% on average over the past years.
KTOS shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 14.00%.
The Revenue has been growing by 9.63% on average over the past years. This is quite good.

EPS 1Y (TTM)4.17%

EPS 3Y15.26%

EPS 5Y7.58%

EPS Q2Q%27.27%

Revenue 1Y (TTM)14%

Revenue growth 3Y11.88%

Revenue growth 5Y9.63%

Sales Q2Q%25.99%

3.2 Future

The Earnings Per Share is expected to grow by 30.95% on average over the next years. This is a very strong growth
Based on estimates for the next years, KTOS will show a quite strong growth in Revenue. The Revenue will grow by 17.43% on average per year.

EPS Next Y11.14%

EPS Next 2Y25.55%

EPS Next 3Y30.77%

EPS Next 5Y30.95%

Revenue Next Year16.41%

Revenue Next 2Y18.3%

Revenue Next 3Y19.55%

Revenue Next 5Y17.43%

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

KTOS is valuated quite expensively with a Price/Earnings ratio of 220.78.
KTOS's Price/Earnings is on the same level as the industry average.
KTOS is valuated expensively when we compare the Price/Earnings ratio to 27.21, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 142.91, KTOS can be considered very expensive at the moment.
The rest of the industry has a similar Price/Forward Earnings ratio as KTOS.
KTOS's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 24.26.

		Industry Rank	Sector Rank
PE	220.78
Fwd PE	142.91

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, KTOS is valued a bit more expensive than the industry average as 64.38% of the companies are valued more cheaply.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	272.86

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates KTOS does not grow enough to justify the current Price/Earnings ratio.
A more expensive valuation may be justified as KTOS's earnings are expected to grow with 30.77% in the coming years.