Core Insights - Kratos Defense & Security Solutions, Inc. (KTOS) shares have increased by 14.4% over the past three months, significantly outperforming the Zacks Aerospace-Defense Equipment industry's growth of 0.5% [1][3] - The rise in defense budgets and the growing demand for unmanned, autonomous tactical systems are key drivers of interest in Kratos Defense's drone and defense technologies [1][3] Company Performance - Kratos Defense is a leading provider of unmanned aerial target drone systems for U.S. military branches and international allies, which are crucial for training and weapons testing [4] - The company has a strong reputation and advanced technology, allowing it to secure new contracts and strategic alliances, thereby expanding its global presence in the unmanned aerial systems market [4] - As of Q3 2025, Kratos Defense reported a backlog of $1.48 billion, indicating solid revenue generation prospects despite sector challenges [7][10] Manufacturing and Infrastructure Expansion - In November 2025, Kratos Defense opened a new Propulsion Manufacturing Facility in Auburn Hills, MI, transitioning to large-scale industrial engine manufacturing to meet increasing demand for defense systems [5][21] - The company also opened a 60,000 sq ft facility in Jerusalem for its microwave electronics division, enhancing its manufacturing and R&D capabilities for critical components [8][21] Strategic Partnerships - In October 2025, Kratos Defense formed a strategic partnership with Korea Aerospace Industries to advance manned-unmanned teaming technologies, leveraging its strengths in unmanned systems [9] Financial Estimates - The Zacks Consensus Estimate for KTOS indicates an EPS increase of 4.08% for 2025 and 38.95% for 2026 [12] - The company has consistently beaten earnings estimates in the past four quarters, with an average surprise of 29.17% [14] Valuation Metrics - KTOS stock's forward 12-month price-to-sales (P/S) ratio is 7.8X, which is a discount compared to the industry's average of 9.42X [18]