Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Kratos Defense & Security Solutions had a gross margin of 24.15% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Kratos Defense & Security Solutions Gross Margin % Related Terms
Kratos Defense & Security Solutions Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
LTS:0JS0 vs HII, MOG.A, DRS: Gross Margin % Comparison
For the Aerospace & Defense subindustry, Kratos Defense & Security Solutions's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Kratos Defense & Security Solutions Gross Margin % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Kratos Defense & Security Solutions's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Kratos Defense & Security Solutions's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Kratos Defense & Security Solutions (LTS:0JS0) has a Gross Margin % of 24.15% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Kratos Defense & Security Solutions and its competitors. This is near median its historical median of 26.01. Over the past decade, Kratos Defense & Security Solutions' Gross Margin % has ranged from 22.24 to 27.74. According to the industry distribution chart, Kratos Defense & Security Solutions ranks #197 out of 342 companies in the Aerospace & Defense industry, placing it in the top 57.6%.
Is Kratos Defense & Security Solutions' Gross Margin % too high?
Kratos Defense & Security Solutions' current Gross Margin % of 24.15% is near median its 10-year median of 26.01. Over the past 10 years, this metric has ranged from a low of 22.24 to a high of 27.74. The Aerospace & Defense industry median Gross Margin % is 26.65. Kratos Defense & Security Solutions' value of 24.15% is 9.4% below this industry median. Based on the distribution chart, Kratos Defense & Security Solutions ranks #197 out of 342 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, Kratos Defense & Security Solutions has a GF Score™ of 77/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Kratos Defense & Security Solutions' Gross Margin % compare to HII and MOG.A?
According to the Aerospace & Defense industry distribution chart, Kratos Defense & Security Solutions ranks #197 out of 342 companies for Gross Margin %. This places Kratos Defense & Security Solutions in the lower half of its industry. The industry median Gross Margin % is 26.65. Kratos Defense & Security Solutions' value of 24.15% is 9.4% below this benchmark. Historically, Kratos Defense & Security Solutions' own Gross Margin % has ranged from 22.24 to 27.74 over the past decade. While the company's 10-year median is 26.01 vs. the industry median of 26.65, Kratos Defense & Security Solutions has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for an Aerospace & Defense company?
The median Gross Margin % among Aerospace & Defense companies is 26.65, based on 342 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Kratos Defense & Security Solutions's current Gross Margin % of 24.15% is 9.4% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Kratos Defense & Security Solutions and its competitors. For the Aerospace & Defense industry, the median Gross Margin % is 26.65 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kratos Defense & Security Solutions's current Gross Margin % is 24.15%, which is near median its own 10-year median of 26.01. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Kratos Defense & Security Solutions stock overvalued right now?
Based on GuruFocus' analysis, Kratos Defense & Security Solutions (LTS:0JS0) is currently considered Significantly Overvalued. The stock's GF Value™ is $28.17, compared to a current price of $46.44 — trading 64.9% above its estimated fair value. The current Gross Margin % is 24.15%, which is near median its 10-year median of 26.01 and 9.4% below the Aerospace & Defense industry median of 26.65. Kratos Defense & Security Solutions' overall GF Score™ is 77/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Kratos Defense & Security Solutions (LTS:0JS0), the current Gross Margin % is 24.15% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Kratos Defense & Security Solutions (LTS:0JS0) Overvalued in 2026?
Based on GuruFocus' analysis, Kratos Defense & Security Solutions stock appears to be overvalued.
The current stock price of $46.44 is trading 64.9% above its estimated GF Value™ of $28.17.
GuruFocus considers Kratos Defense & Security Solutions to be Significantly Overvalued.
Key valuation signals for LTS:0JS0:
Gross Margin %: 24.15% (near median its 10-year median of 26.01)
GF Value™: $28.17 vs. price of $46.44 (64.9% above fair value)
Industry Position: 9.4% below the Aerospace & Defense median (#197 of 342)
No single metric tells the full story. See the LTS:0JS0 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Kratos Defense & Security Solutions Business Description
Kratos Defense & Security Solutions Inc develops and fields transformative, affordable technology, platforms, and systems. The company has two segments; The Kratos Government Solutions (KGS) segment is comprised of an aggregation of KGS operating segments, including its microwave electronic products, space, training, and cybersecurity, C5ISR/modular systems, turbine technologies, and defense and rocket support services operating segments and The Unmanned Systems segment consists of unmanned aerial, unmanned ground, unmanned seaborne and related command, control, and communications system businesses. The company derives a majority of its revenue from the Kratos Government Solutions segment.
77GF Score
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