Okay, so Kratos Defense & Security (KTOS 5.24%)… down five percent today. Five percent! And you know what the weird thing is? It’s not like there’s bad news. It’s the opposite! This analyst, KeyBanc’s Michael Leshock, decides to raise his price target – by fifty percent! – to $130. $130! It’s like he’s deliberately trying to confuse people.
He’s saying the space and defense industries are having a moment. “Significant growth opportunities persisting through 2026.” Oh, great. More buzzwords. As if that explains why the stock is suddenly deciding to take a dive. It’s like they’re actively avoiding making money. And this guy thinks that’s a reason to buy? I swear, analysts live in a different dimension.
He calls it an “outperform” rating. Outperform what, exactly? Common sense? Because that’s clearly not happening here. It’s a completely useless designation. It’s like saying a restaurant “serves food.” Well, no kidding.
So, is this stock a buy? That’s what everyone’s asking. And honestly, I have no idea. Because on the surface, it looks okay. They’ve bumped revenue from under $750 million five years ago to almost $1.3 billion. Fine. But then you dig a little deeper… and that’s where it gets irritating.
They’re barely making a profit. Twenty million in net income? After all that revenue? In 2020, they made eighty million! Eighty! What happened? Did they suddenly develop a fondness for expensive staplers? And don’t even get me started on the cash flow. Negative ninety-three point three million. Negative! It’s like they’re intentionally trying to lose money. It’s infuriating.
Now, the optimists are saying earnings will triple by 2026, hitting sixty million. Okay, let’s play along. Even if that happens, at a $20 billion market cap, you’re looking at a price-to-earnings ratio of 333. Three hundred and thirty-three! It’s absurd. You could buy a small country for that kind of money.
Look, I’m not saying it’s a terrible company. But at this price? It’s just… a sell. It’s a completely irrational valuation. And frankly, it offends me. It really does. It’s a symptom of everything that’s wrong with the market. I’m out.
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2026-01-28 20:42