• In July 2025, Airbus announced a partnership with Kratos Defense & Security Solutions to equip its Valkyrie drone with Airbus mission systems for the German Air Force, as part of broader efforts to make the XQ-58A Valkyrie combat-ready for Germany by 2029.
• This agreement, along with the anticipated expansion of Kratos’ Air Wolf tactical jet drone program and its new US$750 million Poseidon initiative, highlights Kratos’ rising international profile and potential for future multi-year defense contract revenue.
• We'll now explore how Kratos' recent Airbus collaboration could impact its long-term investment narrative and position in unmanned systems.

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Kratos Defense & Security Solutions Investment Narrative Recap

To be a shareholder in Kratos Defense & Security Solutions, you need confidence in the accelerating adoption of unmanned defense systems and the company’s ability to secure and scale major international defense contracts. While the Airbus partnership signals strong momentum and increased global visibility, it may not materially shift the most immediate catalyst, rapid contract wins for tactical drones, or lessen the near-term risk of high cash outflows before production ramps and contracts are finalized.

The recently announced $25 million U.S. Space Force task order is especially relevant given Kratos' expanding government contracts portfolio. This order underscores ongoing demand for its command and control technology, directly tied to the company's key revenue catalyst: leveraging defense modernization toward multi-year contract visibility and larger production volumes.

However, against this backdrop, investors should also be aware that a delay in anticipated contract awards could pressure free cash flow and...

Kratos Defense & Security Solutions’ narrative projects $1.9 billion in revenue and $101.6 million in earnings by 2028. This requires 17.0% yearly revenue growth and a $87.1 million earnings increase from $14.5 million today.

Uncover how Kratos Defense & Security Solutions' forecasts yield a $71.21 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Community fair value estimates for Kratos range from as low as US$9.28 to as high as US$78, based on nine individual viewpoints from the Simply Wall St Community. While opinions diverge, Kratos’ reliance on winning and ramping large production contracts means contract timing and execution remain pivotal for future performance.

Explore 9 other fair value estimates on Kratos Defense & Security Solutions - why the stock might be worth as much as 13% more than the current price!

Build Your Own Kratos Defense & Security Solutions Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Kratos Defense & Security Solutions research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Kratos Defense & Security Solutions research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Kratos Defense & Security Solutions' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.