Kratos Defense & Security SolutionsKTOS -1.96%79 Operating Margin % is 1.78% as of Mar. 2026, which is 37% below its 10-year median of 2.83. GuruFocus rates KTOS with a GF Score™ of 79/100 and a GF Value™ of $28.08 (Significantly Overvalued). The stock has 5 warning signs investors should review. Among 347 Aerospace & Defense companies, Kratos Defense & Security Solutions ranks worse than 67.72% on this metric.
Just like Gross Margin %, it is important to see a company maintains its operating margin over time. Among the same industry, a company with higher operating margin is more efficient in its operation. It is also more stable during industry slowdown or recessions. Peter Lynch prefers those with higher margins than those with lower margins.
Be Aware
Operating Margin % can be manipulated by adjusting the rate of depreciation, depletion and amortization (DDA).
If a company is facing competition, its Operating Margin % may decline. Often the Operating Margin % declines well before the company's Revenue or even profit decline. Therefore, Operating Margin % is a very important indicator of whether the company is facing problems.
For instance, by 2012, Nokia (NOK)'s problems were well known and its stock had lost more than 90% of its market value since 2007. But Nokias Operating Margin % had already been in decline since 2002, although its Earnings per Share (Diluted) were still rising. Investors who paid attention to Operating Margin % would have avoided this huge loss. The same can be said for Research-in-Motion (RIMM).
Therefore, Operating Margin % is a very important screening filter for GuruFocus. GuruFocus's Buffett-Munger screener requires that the profit margin is either consistent or expanding. The Model Portfolio of the Buffett-Munger screener has outperformed the market every year since inception in 2009.
Kratos Defense & Security Solutions Operating Margin % Related Terms
Kratos Defense & Security Solutions Operating 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.
KTOS vs HII, MOG.A, DRS: Operating Margin % Comparison
For the Aerospace & Defense subindustry, Kratos Defense & Security Solutions's Operating Margin %, along with its competitors' market caps and Operating 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 Operating Margin % vs Aerospace & Defense Industry
For the Aerospace & Defense industry and Industrials sector, Kratos Defense & Security Solutions's Operating Margin % distribution charts can be found below:
* The bar in red indicates where Kratos Defense & Security Solutions's Operating Margin % falls into.
Operating Margin % - also known as operating income margin, operating profit margin and return on sales (ROS) - is the ratio of Operating Income divided by net sales or Revenue, usually presented in percent.
* 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.
Kratos Defense & Security Solutions (KTOS) has a Operating Margin % of 1.78% as of Mar. 2026. Operating margin is the ratio of total operating income to net sales. View historical data on Kratos Defense & Security Solutions and its competitors. This is 37% below median its historical median of 2.83. According to the industry distribution chart, Kratos Defense & Security Solutions ranks #235 out of 347 companies in the Aerospace & Defense industry, placing it in the top 67.7%.
Is Kratos Defense & Security Solutions' Operating Margin % too high?
Kratos Defense & Security Solutions' current Operating Margin % of 1.78% is 37% below median its 10-year median of 2.83. The Aerospace & Defense industry median Operating Margin % is 7.75. Kratos Defense & Security Solutions' value of 1.78% is 77% below this industry median. Based on the distribution chart, Kratos Defense & Security Solutions ranks #235 out of 347 companies in the Aerospace & Defense industry, which is below the industry midpoint. Overall, Kratos Defense & Security Solutions has a GF Score™ of 79/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Kratos Defense & Security Solutions' Operating Margin % compare to HII and MOG.A?
According to the Aerospace & Defense industry distribution chart, Kratos Defense & Security Solutions ranks #235 out of 347 companies for Operating Margin %. This places Kratos Defense & Security Solutions in the lower half of its industry. The industry median Operating Margin % is 7.75. Kratos Defense & Security Solutions' value of 1.78% is 77% below this benchmark. While the company's 10-year median is 2.83 vs. the industry median of 7.75, 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 Operating Margin % for an Aerospace & Defense company?
The median Operating Margin % among Aerospace & Defense companies is 7.75, based on 347 companies in the industry. Companies in the top quartile (top 25%) have a Operating Margin % significantly above this median, while those in the bottom quartile fall well below. However, Operating Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Kratos Defense & Security Solutions's current Operating Margin % of 1.78% is 77% 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 Operating Margin % mean?
A high Operating Margin % can signal that a stock is expensive relative to its fundamentals. Operating margin is the ratio of total operating income to net sales. View historical data on Kratos Defense & Security Solutions and its competitors. For the Aerospace & Defense industry, the median Operating Margin % is 7.75 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Kratos Defense & Security Solutions's current Operating Margin % is 1.78%, which is 37% below median its own 10-year median of 2.83. 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 (KTOS) is currently considered Significantly Overvalued. The stock's GF Value™ is $28.08, compared to a current price of $47.01 — trading 67.4% above its estimated fair value. The current Operating Margin % is 1.78%, which is 37% below median its 10-year median of 2.83 and 77% below the Aerospace & Defense industry median of 7.75. Kratos Defense & Security Solutions' overall GF Score™ is 79/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Operating Margin % calculated?
Operating Margin % is calculated from a company's financial statements. For Kratos Defense & Security Solutions (KTOS), the current Operating Margin % is 1.78% 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 (KTOS) Overvalued in 2026?
Based on GuruFocus' analysis, Kratos Defense & Security Solutions stock appears to be overvalued.
The current stock price of $47.01 is trading 67.4% above its estimated GF Value™ of $28.08.
GuruFocus considers Kratos Defense & Security Solutions to be Significantly Overvalued.
Key valuation signals for KTOS:
Operating Margin %: 1.78% (37% below median its 10-year median of 2.83)
GF Value™: $28.08 vs. price of $47.01 (67.4% above fair value)
Industry Position: 77% below the Aerospace & Defense median (#235 of 347)
No single metric tells the full story. See the KTOS 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.
79GF Score
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