What Makes Kratos (KTOS) an Attractive Industrial Stock

Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) is one of the 12 best industrial stocks with more than 50% upside.

On June 9, Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) revealed that it will significantly scale up manufacturing capacity for its Spartan turbojet engine line. Through this, the company aims to keep up with increasing demand from missiles and loitering munition programs.

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The engines offer robust performance and authenticity at a highly affordable cost. To fulfill a growing demand, Kratos is planning to scale output to roughly 3,000 engines over the coming year. The company has already begun self-financed sourcing of long-lead materials and supply chain investments to shorten transit time and ensure manufacturing readiness.

The company highlighted that current national security priorities for replenishing missile inventories and scaling affordable precision-strike capabilities drive demand for low-cost, scalable propulsion systems. Kratos' proactive steps put the company in a position to address these emergent needs while strengthening America's long-range Defense production capabilities.

Steve Fendley, President of Kratos Unmanned Systems Division, added that the need for affordable propulsion systems with scalable high-performance has never been more critical as DOD focuses on recapturing essential missile inventories and expanding cost-effective precision-strike capability.

Later on July 1, Wedbush initiated its coverage of Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) with an $85 target price, which results in almost 83% upside potential for investors. The firm also assigned an Outperform rating to the stock.

Kratos Defense & Security Solutions Inc. (NASDAQ:KTOS) serves the defense industry, commercial markets, national security organizations, and government agencies. The company delivers virtual systems for space vehicles, command and control software, and tracking solutions. It also offers aerial drone systems, propulsion systems for drones, supersonic systems, and intelligence surveillance, and microwave electronic products.

While we acknowledge the potential of KTOS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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