Kratos Defense jumps after Q2 beat-and-raise report

Kratos Defense & Security Solutions' shares rose 10% to $57.05 early Wednesday after quarterly results surpassed Wall Street's expectations and it raised its 2026 forecast.

KTOS jumped as much as 20.2% to $62.34, a two-month high, and was on course for a fifth straight session of gains.

The Round Rock, Texas-based firm late Tuesday said second-quarter revenue grew 30.5% year over year to $458.8 million, beating the consensus view of $410.36 million, according to LSEG.

Adjusted EPS of 21 cents topped the 14 cents profit analysts had modeled.

Overall results were driven by its Government Solutions and Unmanned Systems segments, the company said.

It now sees 2026 revenue of $1.75 billion to $1.81 billion, up from a prior forecast of $1.7 billion to $1.76 billion.

Reacting to the report, Piper Sandler upgraded KTOS to "overweight" from "neutral"; JP Morgan increased its price target to $86 from $82 and Canaccord Genuity boosted its price target to $135 from $130.

The average rating of 23 brokerages is "buy"; the median price target is $105.

With the advance, the stock is down about 25% year to date, well underperforming the roughly 32% gain in the S&P 400 Aerospace & Defense index.