Kratos Defense & Security Solutions, Inc. KTOS recently won a contract worth nearly $45 million for a new satellite system. The work related to this deal will be executed at Kratos engineering, production and integration facilities.

A Brief Note on Kratos Satellite Systems
 

Kratos Defense offers a variety of products to support satellite operations. These products include ground-based fixed antennas, industry-leading satellite command and control software, and Telemetry, Tracking and Command devices.

The company also develops innovative satellite communication capabilities, which provide dynamic power and flexibility to the terrestrial network. For more than 30 years, the company has provided proven enterprise-grade solutions to military, intelligence, government and commercial organizations to support their satellite networks.

KTOS’ Growth Prospects
 

Military satellite technology is quickly evolving, propelled by the rising need for improved communication, surveillance and reconnaissance capabilities and increased resistance to future attacks. With increased hostility across different parts of the globe, investment in technologically advanced military satellite systems has been rapidly expanding. This has been boosting the growth prospects of the military satellite market.

To this end, per Mordor Intelligence, the military satellite market is projected to witness a CAGR of 11% during the 2024-2029 period. Such market growth expectations are likely to benefit Kratos Defense, which has been a top provider of satellite systems.

Notably, the company has a variety of satellite products in its portfolio like EPOCH, quantumCMD, OASYS and its OpenSpace Platform, which is a completely software-defined and managed satellite ground system that enables scalable deployments inside an elastic, cloud-agnostic, virtualized environment.

Such product offerings from Kratos Defense provide it with an important position in the military satellite market. The company expects to benefit from the market growth projection in the form of more order flows, like the latest one.

Opportunities for Other Aerospace Companies
 

Considering the solid growth opportunities of the military satellite market, other defense primes like Lockheed Martin LMT, Airbus SE EADSY and Northrop Grumman Corp. NOC, with a strong presence in this space, are also likely to benefit.

Lockheed Martin uses cutting-edge technology to build capabilities that comprise layered space defense systems. The LM 400, a multi-mission satellite that can be tailored for almost any mission, is LMT’s most flexible satellite bus with capabilities to serve military, civil or commercial users.

LMT boasts a long-term (three to five years) earnings growth rate of 4.7%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 5.2% from the previous year's reported figures.

Airbus is a world leader in military satellite communication services with a broad portfolio of services, including the SATCOMBw, Syracuse 4A and 4B, Skynet 5 and many more. The company has been a long-term operator of the SATCOMBw secure satellite communications system for Germany’s Armed Forces.

EADSY boasts a long-term earnings growth rate of 12%. The Zacks Consensus Estimate for its 2024 sales indicates an improvement of 5.4% from the prior-year numbers.

Northrop Grumman has provided jam-resistant equipment for military communications satellites for more than 30 years. Its Anti-Jam MilSatCom offers flexible, scalable payload capabilities as well as consistent, reliable, jam-resistant covert communications for tactical and strategic warfighters in wartime scenarios.

NOC has a long-term earnings growth rate of 8.7%. The Zacks Consensus Estimate for 2024 sales implies growth of 5.4% from the prior-year figure.

KTOS Stock’s Price Movement
 

In the past six months, shares of KTOS have gained 43.8% compared with the industry’s 21.2% growth.

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KTOS' Zacks Rank
 

Kratos Defense currently carries a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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