MeritValue

KRATOS DEFENSE & SECURITY SOLUTIONS, INC.

KTOSdata completeness 100%17 fiscal years on file
The thesis, from the filings

KRATOS DEFENSE & SECURITY SOLUTIONS, INC. earns about 1% on invested capital, but has diluted owners by 29% over 5 years — worth asking whether the growth reaches owners. The cash-flow models don't apply cleanly here — the ledger says why below.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$811.5M1$898.3M2$1.04B3$1.14B3$1.35B3
Net income−$2M4−$36.9M5−$8.9M6$16.3M6$22M6
Operating cash flow$35.3M7−$25.7M8$65.2M9$49.7M9−$42.1M9
Capital expenditure$46.5M10$45.4M11$52.4M12$58.2M12$95.3M12
Free cash flow (derived)−$11.2M7−$71.1M8$12.8M9−$8.5M9−$137.4M9
Total debt$593.4M13$250.2M14$219.3M15$174.6M16$016
Cash & equivalents$349.4M17$81.3M18$72.8M19$329.3M20$560.6M20
Diluted shares128.0M126.7M130.4M150.9M165.2M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$120.84
your share of equity
Profit it earned you last year
$1.33
Free cash flow it threw off
−$8.32
Debt you’d be carrying
$0

10 shares is a claim on $120.84 of net worth that earned you $1.33 and generated −$8.32 of cash last year, against $0 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
1% avg · 5y
FY21 1%FY22 -1%FY23 1%FY24 2%FY25 2%

It earned an average 1% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+29% shares · 5y

Share count is up 29% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has fallen 100% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
DCF · Growth Exit 5Y
not applicable
3y-median FCF non-positive — growth-exit DCF not applicable (see EPV)
Earnings Power Value
not applicable
normalized (5y-median) earnings non-positive — EPV undefined
Graham Number
$5.95
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-26 · accession 0001069258-24-000007 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-25 · accession 0001069258-25-000008 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001069258-26-000013 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-26 · accession 0001069258-24-000007 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-25 · accession 0001069258-25-000008 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001069258-26-000013 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-26 · accession 0001069258-24-000007 (NetCashProvidedByUsedInOperatingActivitiesContinuingOperations)
  8. 10-K · period ending 2022-12-25 · accession 0001069258-25-000008 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001069258-26-000013 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-26 · accession 0001069258-24-000007 (PaymentsToAcquireProductiveAssets)
  11. 10-K · period ending 2022-12-25 · accession 0001069258-25-000008 (PaymentsToAcquireProductiveAssets)
  12. 10-K · period ending 2023-12-31 · accession 0001069258-26-000013 (PaymentsToAcquireProductiveAssets)
  13. 10-K · period ending 2021-12-26 · accession 0001069258-23-000008 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-25 · accession 0001069258-24-000007 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2023-12-31 · accession 0001069258-25-000008 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2024-12-29 · accession 0001069258-26-000013 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2021-12-26 · accession 0001069258-23-000008 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2022-12-25 · accession 0001069258-24-000007 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2023-12-31 · accession 0001069258-25-000008 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2024-12-29 · accession 0001069258-26-000013 (CashAndCashEquivalentsAtCarryingValue)