Taking everything into account, KTOS scores 4 out of 10 in our fundamental rating. KTOS was compared to 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 shows excellent growth, but is valued quite expensive already.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

KTOS had positive earnings in the past year.
KTOS had a negative operating cash flow in the past year.
The reported net income has been mixed in the past 5 years: KTOS reported negative net income in multiple years.
KTOS had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

KTOS's Return On Assets of 0.83% is in line compared to the rest of the industry. KTOS outperforms 46.58% of its industry peers.
The Return On Equity of KTOS (1.01%) 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.
Measured over the past 3 years, the Average Return On Invested Capital for KTOS is significantly below the industry average of 8.55%.

		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 46.58% of its industry peers.
KTOS's Profit Margin has declined in the last couple of years.
KTOS has a Operating Margin of 1.89%. This is comparable to the rest of the industry: KTOS outperforms 42.47% of its industry peers.
In the last couple of years the Operating Margin of KTOS has declined.
KTOS has a Gross Margin (22.91%) which is comparable to the rest of the industry.
In the last couple of years the Gross Margin of KTOS has remained more or less at the same level.

		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

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

2.2 Solvency

An Altman-Z score of 25.46 indicates that KTOS is not in any danger for bankruptcy at the moment.
KTOS has a better Altman-Z score (25.46) than 94.52% of its industry peers.
A Debt/Equity ratio of 0.04 indicates that KTOS is not too dependend on debt financing.
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	25.46

ROIC/WACC0.09

WACC10.09%

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.
KTOS has a Current ratio of 4.30. This is in the better half of the industry: KTOS outperforms 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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3. Growth

3.1 Past

The Earnings Per Share has been growing slightly by 4.17% over the past year.
The Earnings Per Share has been growing slightly by 7.58% on average over the past years.
Looking at the last year, KTOS shows a quite strong growth in Revenue. The Revenue has grown by 14.00% in the last year.
Measured over the past years, KTOS shows a quite strong growth in Revenue. The Revenue has been growing by 9.63% on average per year.

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
KTOS is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 17.43% yearly.

EPS Next Y11.08%

EPS Next 2Y26.01%

EPS Next 3Y30.21%

EPS Next 5Y30.95%

Revenue Next Year16.41%

Revenue Next 2Y18.45%

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

Based on the Price/Earnings ratio of 206.02, the valuation of KTOS can be described as expensive.
The rest of the industry has a similar Price/Earnings ratio as KTOS.
KTOS is valuated expensively when we compare the Price/Earnings ratio to 28.30, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 132.39, the valuation of KTOS can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as KTOS.
The average S&P500 Price/Forward Earnings ratio is at 25.57. KTOS is valued rather expensively when compared to this.

		Industry Rank	Sector Rank
PE	206.02
Fwd PE	132.39

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of KTOS indicates a slightly more expensive valuation: KTOS is more expensive than 64.38% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	258.87

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
KTOS's earnings are expected to grow with 30.21% in the coming years. This may justify a more expensive valuation.