What Happened?

Shares of aerospace and defense company Kratos (NASDAQ: KTOS) fell 3% in the afternoon session after its President and CEO, Eric DeMarco, sold a significant amount of stock, totaling approximately $16.1 million. According to regulatory filings, DeMarco sold 200,000 shares of the company on December 22nd. The sale was made at an average price of about $80.53 per share. This transaction reduced the CEO's direct ownership in the company by more than 20%. Large stock sales by top executives can sometimes concern investors as it may suggest insider belief that the stock is fully valued.

The shares closed the day at $79.97, down 2.8% from previous close.

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What Is The Market Telling Us

Kratos’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 2 days ago when the stock gained 6.7% on the news that the stock's positive momentum continued as an analyst at KeyBanc initiated coverage on the company with an overweight rating and a $90 price target. 

The move appeared to be a continuation of gains from the previous trading session when the new rating was announced. The analyst cited Kratos's "high-growth exposure" to key military programs as the basis for the positive outlook. These initiatives included hypersonic missiles and aircraft, as well as "collaborative combat aircraft." These, also known as "loyal wingmen," are drones designed to fly alongside and be controlled by piloted fighter jets, representing a significant area of growth in modern defense technology.

Kratos is up 202% since the beginning of the year, but at $79.68 per share, it is still trading 24.6% below its 52-week high of $105.67 from October 2025. Investors who bought $1,000 worth of Kratos’s shares 5 years ago would now be looking at an investment worth $3,018.

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