Shares of Kratos Defense & Security Solutions Inc. (NASDAQ: KTOS) gained noticeably after the company demonstrated strong financial growth and solidified its status as a key player in the unmanned technology market. The rise occurred amid a correction in the company’s valuation, which had previously traded at an extremely high multiplier of 200 times forward earnings.

The company’s recent revenue grew by 19%, reaching $1.3 billion for 2025, while net income increased by 35%. Currently, Kratos management forecasts further revenue growth to $1.6–$1.7 billion in 2026, supported by a massive $446.8 million contract with the U.S. Space Force.

The main growth driver has been the success of the Valkyrie drone, designed for joint flights with fifth-generation fighters. The U.S. Marine Corps has already awarded a $231.5 million contract for the production of these drones, and CEO Eric DeMarco announced plans to increase production volume to 40 aircraft per year by the end of 2027.

Kratos also successfully tested the Mk1 Firejet tactical drone, which costs less than $500,000. This solution meets the Pentagon’s current demand for low-cost, mass-produced technology, making the company attractive to long-term investors despite ongoing risks associated with the high market volatility of the defense sector.