NEW YORK, March 22, 2026, 12:17 PM EDT
Kratos Defense & Security Solutions wrapped up Friday at $84.62, down 8.79%. The stock started out at $91.45 but tumbled all the way to $83.10 during the session. That move shoved shares back into the mid-$80s, marking one more tough day for Kratos.
Kratos is back near the $84 mark it aimed for in February—right around the time it raised cash by selling shares to support capital plans, roll out new products, and pursue deals. But judging by the decline, investors still seem hesitant about the company’s growth narrative following that fresh stock supply.
Kratos wasn’t the only casualty Friday—selling hit broad swaths of the market. The S&P 500 shed 1.51%. The Nasdaq fell harder, down 2.01%. Fresh U.S.-Israeli strikes in Iran rattled traders already worried about inflation and rates. AeroVironment dropped 6.4%. Red Cat plunged 12.5%. “This conflict may go on longer than initially expected,” Jake Dollarhide at Longbow Asset Management told Reuters. Reuters
No new contract news or guidance updates from Kratos with this jump. The last press release in the company’s newsroom dates back to March 13—a Valkyrie program update with Airbus. Over on the investor site, the latest filing is still the preliminary proxy from March 20.
That’s one reason the shares still signal where defense budgets and demand for unmanned systems are headed. Last September, Reuters pointed out that smaller defense players—Kratos and AeroVironment among them—ranked among the sector’s strongest gainers, as Pentagon spending kept flowing into drones and anti-drone gear. Seaport Research’s Richard Safran didn’t mince words: investors should “follow the money.” Reuters
Kratos is still right in the thick of things. In February, Reuters reported the company and Taiwan ran trials on a jet-powered attack drone, with a push to field “large numbers” of cost-effective units. Fast forward to Friday: the Pentagon rolled out plans for a U.S.-led group to ramp up drone work in Asia and kick off missile motor manufacturing with Japan. Reuters
Kratos surprised Wall Street last earnings season—2025 revenue jumped 18.5% to $1.347 billion, backlog climbed to a record $1.573 billion, and management pointed to a $13.7 billion contract pipeline. CEO Eric DeMarco described the company’s opportunity set as the strongest on record. Still, there’s a wrinkle: Kratos warned the first quarter of 2026 will likely be the year’s slowest, and said guidance won’t reflect major Valkyrie production until those customer delivery dates are locked in.
The underwriters took down their full allocation in the equity offering, according to a March 2 SEC filing, bringing the total to 16.4 million shares at $84 apiece. Kratos wrapped up Friday trading at $84.62, barely above the deal price.
