Why Kratos Defense Stock Dropped Then Rebounded Today

By Howard Smith – Apr 2, 2026 at 11:21AM ESTKey PointsTwo Kratos insiders announced large share sales recently. That isn't what investors should focus on, however. Kratos still has a high valution, which could mean more downside. Kratos Defense & Security Solutions (KTOS 0.37%) stock has been declining for the last 10 weeks. That trend continued early today, with two new Securities and Exchange Commission (SEC) filings potentially serving as the trigger. After dropping nearly 6% this morning, though, Kratos shares recovered from that loss. The stock was up by 1.9% as of 10:38 a.m. ET. That still leaves the drone and military technology company down 46% since mid-January. Image source: Getty Images. Kratos drones aren't the only thing sky-high Today's initial slump came as two insiders revealed share sales. Director and chairman of the board William Hoglund announced the sale of 91,500 shares in a filing yesterday. The insider had bought those shares in two separate lots, now worth about $6.5 million, in 2014 and 2016, respectively. Steve Fendley, president of Kratos' Unmanned Systems Division, also reported the sale of 7,000 shares yesterday. Fendley's transactions occurred on March 30, but were part of a trading plan adopted nearly a year ago. That helps to explain why investors reversed course today after realizing the sales weren't consequential. Fendley also still directly owns almost 360,000 shares. ExpandNASDAQ: KTOSKratos Defense & Security SolutionsToday's Change(-0.37%) $-0.25Current Price$67.45Key Data PointsMarket Cap$13BDay's Range$64.00 - $69.4452wk Range$25.78 - $134.00Volume65KAvg Vol4.4MGross Margin22.14% The declining trend in Kratos stock is what investors should take notice of, however. The maker of drones and other military technology is well-positioned, as militaries around the world will likely look to restock after recent hostilities cool. But Kratos is trading at a sky-high price-to-earnings (P/E) ratio based on its 2026 outlook. While the forward P/E has dropped along with the stock price, investors should be wary of a name still trading at about 85 times that metric. Read NextMar 30, 2026 •By Howard SmithWhy Did Kratos Defense Stock Continue to Slide Today?Mar 24, 2026 •By Rich SmithWhy Did Kratos Defense Stock Drop Today?Mar 23, 2026 •By Scott LevineCan You Invest in Anduril Pre-IPO?

Everything You Need to Know in 2026Mar 21, 2026 •By Courtney CarlsenKratos vs. Rocket Lab: Which Under-the-Radar Defense Stock Will Make You Richer?Mar 19, 2026 •By Rich SmithWhy Kratos Defense Stock Dropped TodayMar 16, 2026 •By Rich SmithWhy Kratos Defense Stock Popped, Then DroppedAbout the AuthorHoward Smith is a contributing Motley Fool stock market analyst covering technology and industrial stocks. Prior to The Motley Fool, Howard spent nearly 30 years supervising quality and operations in the steel industry, mostly with leading steel company Nucor. He holds a bachelor’s degree in metallurgical engineering from Lafayette College and a master’s degree in environmental engineering from Johns Hopkins University.TMFBuilt2LastStocks MentionedKratos Defense & Security SolutionsNASDAQ: KTOS$67.34(-0.53%)-$0.36*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.