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When Should You Buy Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)?

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS), which is in the aerospace & defense business, and is based in United States, saw a significant share price rise of over 20% in the past couple of months on the NASDAQGS. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Kratos Defense & Security Solutions’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Kratos Defense & Security Solutions

What's the opportunity in Kratos Defense & Security Solutions?

Good news, investors! Kratos Defense & Security Solutions is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $18.74, but it is currently trading at US$14.92 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Kratos Defense & Security Solutions’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Kratos Defense & Security Solutions?

NasdaqGS:KTOS Past and Future Earnings May 6th 2020
NasdaqGS:KTOS Past and Future Earnings May 6th 2020

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Kratos Defense & Security Solutions’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Since KTOS is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

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Are you a potential investor? If you’ve been keeping an eye on KTOS for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy KTOS. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Kratos Defense & Security Solutions. You can find everything you need to know about Kratos Defense & Security Solutions in the latest infographic research report. If you are no longer interested in Kratos Defense & Security Solutions, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.