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Kratos Defense (KTOS) Wins $14.7M Deal to Support BQM-177A SSAT
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Kratos Defense & Security Solutions’ (KTOS - Free Report) business unit, Kratos Unmanned Aerial Systems, recently clinched a contract to support the BQM-177A Subsonic Aerial Target system (“SSAT”). The contract was awarded by the Naval Air Systems Command, Patuxent River.
Details of the Deal
Valued at $14.7 million, the agreement is spread across a five-year ordering period. Per the terms of the deal, Kratos will provide software maintenance and updates as part of the support work for the BQM-177A SSAT.
Significance of BQM-177A
The BQM-177A is the U.S. Navy’s next-generation SSAT. Its aerodynamic design and unmatched performance capabilities make it the best choice for highly dynamic, high-subsonic, sea-skimming anti-ship cruise missile threat emulation.
It supports a variety of mission requirements by carrying a wide array of internal and external payloads. These include proximity scoring, Identification Friend or Foe, passive and active RF augmentation, electronic counter-measures, infrared augmentation (plume pods), chaff and flare dispensers and towed targets.
Due to its remarkable features that are well-suited for any military mission, Kratos continues to witness a steady inflow of orders involving the aerial system. The latest contract win is a testament to the same. This, in turn, should bolster KTOS’ revenues from its Kratos Unmanned Aerial Systems business unit.
Growth Prospects
The demand for the unmanned aerial system (“UAS”) may increase manifold considering the current threat environment, especially after the turbulence between Russia and Ukraine. Due to its excellence in providing intelligence, surveillance and reconnaissance data for military missions, coupled with the features of remote controlling and a zero-mortality rate, the UAS market may witness significant growth.
Per the reports from Research and Markets, the unmanned aerial vehicle market is likely to witness a CAGR of more than 7% during the 2022-2027 period. Such growth prospects entail opportunities for Kratos to capitalize on the increasing demand as it already enjoys an established position in the UAS market with its impressive product portfolio.
Defense players that can reap the benefits of the expanding market are as follows:
Lockheed Martin (LMT - Free Report) : It has been delivering advanced autonomous systems to the U.S. Military and allies to meet customers’ most demanding missions. Its product range includes the X-44 Manta prototype, the Indago 3 unmanned drone and OUTRIDER.
Lockheed Martin’s long-term earnings growth rate is pegged at 5.5%. Shares of LMT have returned 20.2% value to investors in the past year.
Textron (TXT - Free Report) : Its Textron Systems unit offers multi-mission-capable unmanned aircraft systems, which have accumulated more than 1.4 million flight hours of experience. Its product range includes the Shadow Tactical UAS, the Aerosonde Small UAS with the available Aerosonde HQ vertical-takeoff-and-landing kit and the next-generation NIGHTWARDEN Tactical UAS.
Textron has a long-term earnings growth rate of 12.5%. TXT’s investors have gained 1.9% in the past three months.
Northrop Grumman (NOC - Free Report) : Its Autonomous Systems unit provides unmanned autonomous aircraft systems, including high-altitude long-endurance, strategic ISR systems and vertical take-off and landing tactical ISR systems. Its programs include MQ-4C Triton, RQ-4 Global Hawk, North Atlantic Treaty Organization Alliance Ground Surveillance and MQ-8B and MQ-8C Fire Scout and BAT UAS.
Northrop Grumman boasts a long-term earnings growth rate of 2.2%. NOC’s investors have gained 38.2% in the past year.
Price Movement
In the past year, shares of Kratos Defense have declined 46.7% against the industry’s growth of 1.4%.
Image: Bigstock
Kratos Defense (KTOS) Wins $14.7M Deal to Support BQM-177A SSAT
Kratos Defense & Security Solutions’ (KTOS - Free Report) business unit, Kratos Unmanned Aerial Systems, recently clinched a contract to support the BQM-177A Subsonic Aerial Target system (“SSAT”). The contract was awarded by the Naval Air Systems Command, Patuxent River.
Details of the Deal
Valued at $14.7 million, the agreement is spread across a five-year ordering period. Per the terms of the deal, Kratos will provide software maintenance and updates as part of the support work for the BQM-177A SSAT.
Significance of BQM-177A
The BQM-177A is the U.S. Navy’s next-generation SSAT. Its aerodynamic design and unmatched performance capabilities make it the best choice for highly dynamic, high-subsonic, sea-skimming anti-ship cruise missile threat emulation.
It supports a variety of mission requirements by carrying a wide array of internal and external payloads. These include proximity scoring, Identification Friend or Foe, passive and active RF augmentation, electronic counter-measures, infrared augmentation (plume pods), chaff and flare dispensers and towed targets.
Due to its remarkable features that are well-suited for any military mission, Kratos continues to witness a steady inflow of orders involving the aerial system. The latest contract win is a testament to the same. This, in turn, should bolster KTOS’ revenues from its Kratos Unmanned Aerial Systems business unit.
Growth Prospects
The demand for the unmanned aerial system (“UAS”) may increase manifold considering the current threat environment, especially after the turbulence between Russia and Ukraine. Due to its excellence in providing intelligence, surveillance and reconnaissance data for military missions, coupled with the features of remote controlling and a zero-mortality rate, the UAS market may witness significant growth.
Per the reports from Research and Markets, the unmanned aerial vehicle market is likely to witness a CAGR of more than 7% during the 2022-2027 period. Such growth prospects entail opportunities for Kratos to capitalize on the increasing demand as it already enjoys an established position in the UAS market with its impressive product portfolio.
Defense players that can reap the benefits of the expanding market are as follows:
Lockheed Martin (LMT - Free Report) : It has been delivering advanced autonomous systems to the U.S. Military and allies to meet customers’ most demanding missions. Its product range includes the X-44 Manta prototype, the Indago 3 unmanned drone and OUTRIDER.
Lockheed Martin’s long-term earnings growth rate is pegged at 5.5%. Shares of LMT have returned 20.2% value to investors in the past year.
Textron (TXT - Free Report) : Its Textron Systems unit offers multi-mission-capable unmanned aircraft systems, which have accumulated more than 1.4 million flight hours of experience. Its product range includes the Shadow Tactical UAS, the Aerosonde Small UAS with the available Aerosonde HQ vertical-takeoff-and-landing kit and the next-generation NIGHTWARDEN Tactical UAS.
Textron has a long-term earnings growth rate of 12.5%. TXT’s investors have gained 1.9% in the past three months.
Northrop Grumman (NOC - Free Report) : Its Autonomous Systems unit provides unmanned autonomous aircraft systems, including high-altitude long-endurance, strategic ISR systems and vertical take-off and landing tactical ISR systems. Its programs include MQ-4C Triton, RQ-4 Global Hawk, North Atlantic Treaty Organization Alliance Ground Surveillance and MQ-8B and MQ-8C Fire Scout and BAT UAS.
Northrop Grumman boasts a long-term earnings growth rate of 2.2%. NOC’s investors have gained 38.2% in the past year.
Price Movement
In the past year, shares of Kratos Defense have declined 46.7% against the industry’s growth of 1.4%.
Image Source: Zacks Investment Research
Zacks Rank
Kratos Defense currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.