SAN DIEGO – Stock in Kratos Defense & Security Solutions Inc. (Nasdaq: KTOS) touched a 52-week high of $23.98 during trading on Wednesday (Sept. 18). The achievement followed the release of several news items from the diversified aerospace and tech company.
While correlation is not the same thing as causation, the market seemed to see something it liked.
President
Kratos Unmanned Systems Division
On Tuesday, the business announced a $79.9 million delivery order from the U.S. Air Force for target drones. The Air Force is buying its 20th lot of BQM-167A target aircraft systems.
The 60 autonomous aircraft incorporate Gas, Aero, Payload, Power (GAPP) enhancements, representing the largest capability upgrade to date for the BQM-167A product baseline. The increased capabilities provided by the GAPP upgrade help the BQM-167A simulate the advanced threats faced by Air Force pilots.
Monday offered more news: Kratos’ satellite technology business received a multimillion-dollar contract from Thaicom Public Co. Ltd. of Bangkok for a new end-to-end ground system.
Small Jet Engines for Powered Munitions
On Sept. 12, Kratos’ Technical Directions Inc. business unit (or TDI) announced it was offering immediate availability on four classes of the company’s low-cost, high-performance turbojet engines, which range from 30 to 200 pounds of thrust.
Benchmark Co. analyst Josh Sullivan responded with a research note saying the Kratos jets could be a key part of powered munitions. He added that Anduril, the venture-backed defense firm from Orange County, plans a line of expendable autonomous air vehicles.
Anduril announced its line of air-breathing vehicles, called Barracuda, on Sept. 12.
“KTOS [is the] only real low-cost and importantly high-volume supplier of engines for this accelerating market,” Sullivan wrote, reiterating his buy rating for Kratos shares. TDI builds its engines in Michigan from parts sourced in the United States. Its mass-production capability has roots in the auto industry.
“We understand the importance of rapidly fielding cost-effective solutions in today’s fast-paced defense environment,” said Steve Fendley, president of Kratos Unmanned Systems Division. “With the large number of programs and technology efforts underway in the affordable weapons classes, by building ahead and having these affordable and high-performance engines stocked on our shelves in Michigan, we enable rapid evaluation, test, integration and ultimately, all up round delivery without the traditional front end lead-time delays.”
Continuing in the jet aircraft theme, Kratos Defense on Monday (Sept. 16) announced the completion of a ground test campaign of a cost-optimized, limited-life turbofan engine built by another business unit, Florida-based Kratos Turbine Technologies. The corporation called it a significant milestone.
Over the last year, Kratos stock has traded in the range of $13.98 to $23.98.
Kratos Defense & Security Solutions
FOUNDED: 1994 as Wireless Facilities Inc.
CEO: Eric DeMarco
HEADQUARTERS: Scripps Ranch
BUSINESS: Defense contractor
REVENUE: $1.04 billion in 2023
STOCK: KTOS (Nasdaq)
EMPLOYEES: Approximately 3,900 full-time, part-time and on-call employees worldwide
WEBSITE: kratosdefense.com
NOTABLE: Kratos Turbine Technologies of Jupiter, Florida — one of the company’s jet engine factories — is one of its fastest growing divisions.
