New York, January 24, 2026, 06:33 EST — Market closed
Shares of Kratos Defense & Security Solutions (KTOS) dropped 3% on Friday, closing at $110.39, following a steep retreat from last week’s peak. Since January 16, when the stock closed at $130.72, KTOS has lost roughly 15.6%. (StockAnalysis)
The drop is significant since Kratos is a popular pick for those betting on the Pentagon’s move toward cheaper, uncrewed aircraft paired with crewed fighters. As U.S. markets reopen Monday, investors face a packed defense earnings calendar. The stock, still up sharply for January, now seems to demand immediate results, showing little tolerance for anything pushed into the future.
Piper Sandler started coverage Thursday, assigning a Neutral rating and setting a $99 price target. The firm described Kratos as “a disruptive production-ready defense contractor,” but noted the recent rally has stretched the risk-reward, making it a less appealing entry right now. (TipRanks)
Kratos scored a major win earlier this month when Northrop Grumman was awarded the U.S. Marine Corps’ Marine Air-Ground Task Force Uncrewed Expeditionary Tactical Aircraft (MUX TACAIR) Collaborative Combat Aircraft program. The deal pairs Northrop’s mission systems with Kratos’ XQ-58A Valkyrie drone. “Delivering innovative solutions that meet the needs of the warfighter with unmatched speed and reliability,” said Northrop executive Krys Moen. On Kratos’ side, unmanned-systems president Steve Fendley emphasized that the package hits “a price point” designed for mass deployment. (Kratos Defense)
The stock plunged rapidly after a sharp jump. Shares soared almost 14% on Jan. 8, hitting an intraday peak of $134 earlier this month, only to give back gains as sellers stepped in toward the end of the week. (Investing)
Fund flows have weighed on the stock lately. Data from cathiesark.com, which tracks ARK Invest’s daily trades, reveals ARKK offloaded more Kratos shares on Jan. 22. (Cathiesark)
Defense stocks were all over the place Friday, with no clear sector momentum. Huntington Ingalls dropped 1.3%, Lockheed Martin and General Dynamics also slipped, while Northrop Grumman saw a slight uptick, according to MarketWatch data. (MarketWatch)
Next week’s lineup could shape the outlook for the sector — and for suppliers like Kratos. Northrop plans to release its earnings Tuesday, Jan. 27, with RTX following that same morning. General Dynamics reports Wednesday, Jan. 28, while L3Harris holds its earnings call Thursday, Jan. 29. (Northropgrumman)
Traders watching Kratos will focus on any hints about the Marine Corps and the wider Defense Department’s timeline for collaborative combat aircraft. They’ll be parsing what “rapid” actually translates to in budget language. Some accelerated programs lean on OTAs — “other transaction agreements” — a contracting method that can quicken development but also allows the scope to shift as needs evolve.
Downside risk is clear: contract wins don’t instantly translate into steady revenue, and program timelines often slip. Following the recent rally, any signs of slower deliveries, reduced order sizes, or delayed funding could weigh more heavily on the stock than usual.
Kratos hasn’t set a date for its upcoming earnings report yet; Wall Street schedules suggest mid-to-late February, with Feb. 19 showing up on one calendar. Traders will be keen to see if the stock steadies once U.S. markets open Monday, before turning their attention to defense sector earnings due Tuesday for fresh momentum. (Businessinsider)
