BTIG notes that on January 6, Kratos announced that it has been awarded a five-year Other Transaction Agreement for the MultiService Advanced Capability Hypersonic Test Bed 2.0 under Task Area 1. If all options are exercised, the award could be worth $1.45B, marking the largest award in Kratos’ history. The firm looks favorably upon the long-term revenue visibility afforded by the award as well as Kratos’ ability to capture higher value work and diversify into other high growth end markets beyond unmanned systems. BTIG says it may revisit its estimates after Q4 2024 earnings, and reiterates its Neutral rating on the shares as it awaits further information.
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