GE Aerospace Deal and Unmanned Aircraft Exposure Might Change the Case for Investing in Kratos (KTOS)

• In the past week, Kratos Defense & Security Solutions was highlighted at the ITS World Congress 2025, where Vice President Maynard Factor discussed advancements at the Georgia World Congress Center in Atlanta, alongside news of a propulsion systems partnership with GE Aerospace for unmanned aircraft.

• This spotlight on Kratos comes as industry observers underscore a surge in demand for the company’s defense technologies, driven by increased defense funding and high-profile collaborations that strengthen its foothold in unmanned and hypersonic platforms.

• We’ll explore how the GE Aerospace collaboration could further solidify Kratos’ position in next-generation defense technologies and shape its investment narrative.

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For Kratos Defense & Security Solutions, the core investment thesis continues to center on its leadership in next-generation defense technologies, with growth opportunities fueled by rising global defense spending and accelerated procurement cycles. The GE Aerospace partnership for unmanned aircraft propulsion systems stands out; while it may deepen Kratos’ competitive advantages and contract pipeline over time, it does not appear to alter the immediate catalyst, which remains timely contract awards for unmanned platforms. The most pressing risk for investors still relates to Kratos’ high internal investment and the potential strain on free cash flow if contract wins are delayed.

Among recent announcements, the GE Aerospace propulsion partnership is most relevant, as it expands Kratos’ footprint in the critical unmanned systems segment, a driver behind current demand and a focus of recent federal funding. This collaboration could accelerate technology transitions but also intensifies performance pressures around rapid scaling and production outcomes. As Kratos continues to raise its profile at defense industry events and pursue larger programs, investor exposure to working capital risk persists if anticipated contract awards do not ramp as expected.

Yet, investors should also be mindful that, unlike headline-grabbing contract wins, the financial impact of such high-profile partnerships can lag expectations in the near term, especially if…

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Kratos Defense & Security Solutions is projected to reach $1.9 billion in revenue and $100.9 million in earnings by 2028. This outlook assumes 17.0% annual revenue growth and an $86.4 million increase in earnings from the current $14.5 million level.