Published on 1 Dec 2021 on Zacks via Yahoo Finance
Kratos' (KTOS) KUSD Arm Wins $4M International Contract
Kratos Defense & Security Solutions, Inc. KTOS unit Kratos Unmanned Systems Division (KUSD) was awarded a $4.1-millioncontract from an international customer for high performance, unmanned aerial target drone system aircraft and related services. For security reasons, the only information provided is that work under this contract award will be performed at the safe and confidential Kratos manufacturing facilities, and at customer locations.KTOS aims to provide affordability along with high-performance target and tactical drone systems. The broad application set of these drone systems and the speed at which they can be developed, produced, modified and reconfigured creates the high utility, affordable cost ratio in comparison to the manned systems.
Kratos’ Drone Demand
Kratos is the primary unmanned aerial target drone system provider to the U.S. Air Force, Navy, Army and numerous allied foreign defense agencies. The revival of strategic weapon systems by the United States and its allies is improving global demand for Kratos target drone systems. During the third quarter, KTOS clinched a $374-million award, involving the target drone.Following the third quarter, Kratos' Air Wolf tactical drone system completed a flight that was 100% successful at the Burns Flat, Oklahoma Range Facility. In August, the U.S. Air Force reiterated its commitment to be ready for the 2023 Skyborg Vanguard Program of Record under which Kratos' Valkyrie and Mako jet drones are both recognized participants.Looking ahead, for its unmanned systems target drone business, Kratos is projected to achieve approximately $250 million of revenues in the next few years, backed by multiple programs and opportunities.Considering the fact that drones need turbines and engines for power and Kratos’ Turbine Technologies division caters to this drone market, a sum of$7.5 billion of the 2021 Pentagon budget allocated to drones, robotics and related technologies should boost Kratos’ prospects. Such a solid organic potential must have bolstered investors’ confidence in the stock.