Forensic Analysis · Industrials / Manufacturing / Defense · as of Aug 11, 2026
Kratos Defense & Security Solutions, Inc. (KTOS)
A forensic read on Kratos Defense & Security Solutions, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
D · Weak — demands caution
Forensic grade
Safe
Financial health
14.3
Distress distance
Clean
Earnings quality
5
Forensic signals
371.3
P / E (ttm)
1.1%
ROE
$11.6B
Market cap
18.5%
Revenue growth
This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.
Kratos Defense & Security Solutions, Inc. earns a D (Weak — demands caution) forensic quality grade, and its balance-sheet distress test reads 14.3, placing it in the Safe zone. 5 forensic signals were flagged in its latest SEC filings, led by return on invested capital.
What the filings flag
1.0%
FY2025
Return on invested capital.Return on invested capital is 1.0% in the latest fiscal year and steady — well below its ~9% cost of capital, so reinvested dollars may be destroying value, not building it.
+9.2%/yr
FY2022–FY2025
Share-count dilution.Diluted share count changed +30% over the last 3 years to FY2025 (+9.2%/yr). The count is growing: more stock was issued than repurchased over this window, so aggregate results grew faster than their per-share equivalents. That's ~9.2% shaved off per-share growth every year — total profit has to grow that much just to keep earnings-per-share flat, and a stake held since FY2022 has been diluted ~23%.
3% of rev
FY2025
Stock-based comp load.Stock-based compensation ran 3% of revenue in FY2025 — about $0.21 per diluted share. The cost of it is not in the cash flow — no cash left the business — it is in the count: holders gave up about 9.4% of the company a year, and that rate is not falling. That is the figure to weigh, not the share of free cash flow.
stopped
FY2011→FY2013
Shareholder returns — halted.Capital returns have STOPPED — $11M of buybacks + dividends in FY2011, but ~$0 in FY2013. A halt usually means the company is conserving cash.
+18.0%
FY2024→FY2025
Accruals ratio (% of NOA).Net operating assets grew +18.0% relative to their own average in FY2025 — scaled by NOA itself, not total assets (see the Forensic Screens card's differently-scaled Sloan Accrual Ratio for that read). Accruals are building faster than is comfortable — part of profit is sitting in the balance sheet rather than turning to cash. The build is led by inventory up +60% against +22% in cost of sales and receivables up +40% against revenue +19%. The cash-flow cross-check is more mixed: reported earnings ran in line with operating cash by 5% of net operating assets, diverging from the balance-sheet accrual read.
Key fundamentals
Latest Revenue$1.35B
Revenue Growth YoY+18.5%
Revenue CAGR (3yr)+14.4%
Net Margin1.6%
Free Cash Flow-$137.4M
Return on Equity1.1%
Debt / Equity0.00x
The forensic grade and screens above are free — no account needed. Want the AI investment read on top — the 0–100 rating, thesis, bull-vs-bear, red flags and the 12-month scenario, written from Kratos Defense & Security Solutions, Inc.'s actual 10-K/10-Q/8-K filings?