Is KTOS a high-quality business?

AlphaMadera's AlphaQuality grade scores Kratos Defense & Security Solutions, Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how KTOS compares to a Buffett-style quality bar.

What is Kratos Defense & Security Solutions, Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to KTOS based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes KTOS a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

KTOS - Kratos Defense & Security Solutions, Inc.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $109.58 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Cyclical & Capital-Intensive

AlphaQuality — archetype-weighted quantitative grade

C- 44.5 / 100 composite

Composite Grade

Composite of six pillars weighted for cyclical & capital-intensive businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 15%

F 26.4

5yr Avg ROIC 0.8% 14/100
Operating Margin Trend +0.01 pp/yr 55/100

Capital Efficiency

Weight: 15%

F 6.4

5yr Avg ROE -0.1% 10/100
5yr Share-Count CAGR 7.8% 0/100

Growth Quality

Weight: 10%

A 91.9

5yr Revenue CAGR 13.5% 88/100
5yr EPS CAGR 18.2% 92/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

F 3.0

5yr FCF Margin -3.9% 5/100
5yr FCF/NI Conversion -3.38x 0/100

Balance Sheet

Weight: 25%

A 87.2

Net Debt / EBITDA -3.67x 100/100
Interest Coverage (EBIT/Int) 4.24x 57/100
Altman Z-Score 10.45 100/100

Stability

Weight: 20%

D+ 40.3

EPS Volatility (σ/μ) 0.89 4/100
Piotroski F-Score 4 44/100
Negative-Revenue Years (5) 0/5 100/100

4 of 4 gurus held; 1 new buy; 3 trimmed; 1 full exit.

Holders: 4 +1
Avg Δ position: -57.0%
New buys: 1
Full exits: 1

Soros new
Greenblatt sold -100%
Wood decreased -78%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (15%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (10%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (25%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (20%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.