KTOS Initiation; Merchant Supplier to the U.S. Defense Complex; $85 PT

Research evidence excerpt

KTOS Initiation; Merchant Supplier to the U.S. Defense Complex; $85 PT

Company Report

June 30, 2026 Kratos Defense and Security Solutions

Rating: (KTOS)OUTPERFORM

Price: KTOS Initiation; Merchant Supplier to the U.S. Defense

$47.21 Complex; $85 PT

12-Month Price Target:

$85.00

The Wedbush View

Analysts

Sam Brandeis We are initiating coverage on Kratos Defense and Security Solutions (KTOS) with

(212) 222-3005 an OUTPERFORM rating and $85 price target. Kratos is the merchant arms suppliersam.brandeis@wedbush.com to the entire U.S. defense complex, having chosen to sell critical subsystems,Dan Ives

(212) 344-2073 engines, hypersonic vehicles, and ground software to virtually every prime and

Dan.Ives@wedbush.com new-entrant player rather than compete as a would-be prime. In our view this is

the single most misunderstood element of the story. The market frames Kratos as

a drone company fighting for platform dominance, but management has built a

Company Information picks-and-shovels franchise embedded across hypersonics, missile defense, space,

Market Cap (M) $8,844 and microelectronics that captures content regardless of which platform wins.Enterprise Value (M) $7,565

52-Week Range $41.75 - $134.00 ~90% of what Kratos does is supply a significant subsystem to the traditional primesNet Debt (M) $(1,327.50)

and nearly all new defense-tech entrants. It builds Patriot hardware for Raytheon,

REV (M) in $ THAAD for Lockheed, Integrated Battle Command System (IBCS) hardware for

FYE Dec 2026E 2027E 2028E Northrop, and indirect-fires content for Leidos, and sells small turbojet engines

Q1 Mar 371.0A 467.2E 586.5E to essentially every player that needs one. Customers share platform designs Q2 Jun 406.8E 504.3E 639.5E