We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kratos (KTOS) Up 10.6% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Kratos (KTOS - Free Report) . Shares have added about 10.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kratos due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Kratos Defense Q2 Earnings Top, Revenues Rise Y/Y
Kratos Defense reported second-quarter 2024 adjusted earnings of 14 cents per share, up 55.6% from 9 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 75%.
Kratos Defense reported GAAP earnings of 5 cents per share against a loss of 2 cents in the second quarter of 2023.
Total Revenues
Total revenues were $300.1 million, which surpassed the Zacks Consensus Estimate of $277 million by 8%. The figure also increased 16.8% from $256.9 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the Kratos Government Solutions and Unmanned Systems segments’ revenue growth.
Operational Update
Kratos Defense’s selling, general and administrative expenses increased 11.7% year over year. Research and development expenses rose 3%. Depreciation expenses and expenses related to the amortization of intangible assets surged 80% and 57.1%, respectively.
The company reported operating income of $12.5 million, which increased massively from the year-ago quarter’s $1.8 million.
It posted a consolidated book-to-bill ratio of 1.1-1.0, with bookings worth $334.1 million.
The total backlog at the end of the second quarter was $1.30 billion compared with $1.27 billion at the end of the first quarter of 2024.
Segmental Performance
Unmanned Systems: Net revenues improved 63.7% year over year to $85.8 million.
Kratos Government Solutions: Net revenues increased 4.6% to $214.3 million on a year-over-year basis.
Financial Details
As of Jun 30, 2024, cash and cash equivalents totaled $308.2 million, up from $72.8 million as of Dec 31, 2023. The long-term debt amounted to $179.5 million as of Jun 30, 2024, down from $219.3 million recorded as of Dec 31, 2023.
During the second quarter, cash outflow from operating activities totaled $2 million compared with $2.2 million in the previous year.
Guidance
Kratos Defense has provided its outlook for the third quarter and reiterated its 2024 guidance. For the third quarter, it expects revenues to be in the $265-$280 million range. The Zacks Consensus Estimate for revenues is pegged at $290.4 million, higher than the company’s guided range.
For 2024, Kratos Defense still expects revenues to be in the range of $1.13-$1.15 billion. The consensus estimate for revenues is pegged at $1.15 billion, in line with the higher end of the company’s projected range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -38.89% due to these changes.
VGM Scores
At this time, Kratos has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kratos has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Kratos belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, TransDigm Group (TDG - Free Report) , has gained 8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
TransDigm reported revenues of $2.05 billion in the last reported quarter, representing a year-over-year change of +17.3%. EPS of $9 for the same period compares with $7.25 a year ago.
TransDigm is expected to post earnings of $9.26 per share for the current quarter, representing a year-over-year change of +15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for TransDigm. Also, the stock has a VGM Score of C.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Kratos (KTOS) Up 10.6% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Kratos (KTOS - Free Report) . Shares have added about 10.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Kratos due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Kratos Defense Q2 Earnings Top, Revenues Rise Y/Y
Kratos Defense reported second-quarter 2024 adjusted earnings of 14 cents per share, up 55.6% from 9 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 75%.
Kratos Defense reported GAAP earnings of 5 cents per share against a loss of 2 cents in the second quarter of 2023.
Total Revenues
Total revenues were $300.1 million, which surpassed the Zacks Consensus Estimate of $277 million by 8%. The figure also increased 16.8% from $256.9 million recorded in the year-ago quarter.
The year-over-year improvement can be attributed to the Kratos Government Solutions and Unmanned Systems segments’ revenue growth.
Operational Update
Kratos Defense’s selling, general and administrative expenses increased 11.7% year over year. Research and development expenses rose 3%. Depreciation expenses and expenses related to the amortization of intangible assets surged 80% and 57.1%, respectively.
The company reported operating income of $12.5 million, which increased massively from the year-ago quarter’s $1.8 million.
It posted a consolidated book-to-bill ratio of 1.1-1.0, with bookings worth $334.1 million.
The total backlog at the end of the second quarter was $1.30 billion compared with $1.27 billion at the end of the first quarter of 2024.
Segmental Performance
Unmanned Systems: Net revenues improved 63.7% year over year to $85.8 million.
Kratos Government Solutions: Net revenues increased 4.6% to $214.3 million on a year-over-year basis.
Financial Details
As of Jun 30, 2024, cash and cash equivalents totaled $308.2 million, up from $72.8 million as of Dec 31, 2023. The long-term debt amounted to $179.5 million as of Jun 30, 2024, down from $219.3 million recorded as of Dec 31, 2023.
During the second quarter, cash outflow from operating activities totaled $2 million compared with $2.2 million in the previous year.
Guidance
Kratos Defense has provided its outlook for the third quarter and reiterated its 2024 guidance. For the third quarter, it expects revenues to be in the $265-$280 million range. The Zacks Consensus Estimate for revenues is pegged at $290.4 million, higher than the company’s guided range.
For 2024, Kratos Defense still expects revenues to be in the range of $1.13-$1.15 billion. The consensus estimate for revenues is pegged at $1.15 billion, in line with the higher end of the company’s projected range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -38.89% due to these changes.
VGM Scores
At this time, Kratos has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Kratos has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Kratos belongs to the Zacks Aerospace - Defense Equipment industry. Another stock from the same industry, TransDigm Group (TDG - Free Report) , has gained 8% over the past month. More than a month has passed since the company reported results for the quarter ended June 2024.
TransDigm reported revenues of $2.05 billion in the last reported quarter, representing a year-over-year change of +17.3%. EPS of $9 for the same period compares with $7.25 a year ago.
TransDigm is expected to post earnings of $9.26 per share for the current quarter, representing a year-over-year change of +15.3%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.5%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for TransDigm. Also, the stock has a VGM Score of C.