Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Kratos Defense & Security Solutions, Inc Popped 48% Last Month

By Travis Hoium - Apr 7, 2016 at 9:07AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Stronger-than-expected earnings and a few contract wins had investors excited about this defense stock in March.

Image source: Kratos Defense & Security Solutions.

What: Shares of Kratos Defense & Security Solutions, Inc (KTOS 3.43%) jumped 48% as earnings beat expectations and the company won a number of contract bids.

So what: Fourth-quarter revenue fell 7.6% from a year ago to $177.5 million, and net loss nearly doubled to $4.0 million, or $0.07 per share. But on an adjusted basis the company earned $0.02 per share, which easily topped the $0.11 loss Wall Street expected. 

Also during March, the company won a $5.49 million contract for Oriole Thrust Vector Control Systems, an $11.2 million order for satellite and communications products, and a $3.5 million order for specialty products for the U.S. warfighter. 

Now what: After a rough start to the year, Kratos has now beaten earnings expectations two straight quarters and returned to around breakeven. Losing less money is good, but it's also concerning that backlog dropped from $1.1 billion a year ago to $914 million to end 2015. I would like to see growth in the backlog and improvement on the GAAP bottom line before considering jumping into the stock.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kratos Defense & Security Solutions Stock Quote
Kratos Defense & Security Solutions
KTOS
$14.77 (3.43%) $0.49

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
356%
 
S&P 500 Returns
124%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.