Leonardo DRS, Inc. (DRS) vs Kratos Defense & Security Solutions, Inc. (KTOS)

Leonardo DRS, Inc. and Kratos Defense & Security Solutions, Inc. are both Aerospace & Defense companies. Leonardo DRS, Inc. is the larger, with a market value of $10.0B against $8.8B — 1.1× the size. Leonardo DRS, Inc. trades at the lower P/E: 30.4× against 268×. Kratos Defense & Security Solutions, Inc. grew revenue faster over the last twelve months: 25.5% against 10.5%. Leonardo DRS, Inc. has the higher net margin (8.52% vs 2.03%) and the higher return on invested capital (9.27% vs 0.54%). Across the 21 metrics below, Leonardo DRS, Inc. leads on 16 and Kratos Defense & Security Solutions, Inc. on 5.

Valuation

Metric DRS KTOS Aerospace & Defense median
P/E 30.43 268.35 33.00
P/S 2.62 5.65 3.63
P/B 3.53 2.51 3.24
Price to free cash flow 27.21 n/m 34.01
EV/EBITDA 19.76 76.44 18.69
EV/Sales 2.59 4.80 3.94
Earnings yield 3.29% 0.37% 1.31%
Free cash flow yield 3.68% (1.50%) 0.00%

Profitability

Metric DRS KTOS Aerospace & Defense median
Gross margin 24.87% 23.00% 25.48%
Operating margin 10.53% 1.21% 4.54%
Net margin 8.52% 2.03% 2.22%
Free cash flow margin 9.63% (8.47%) 0.00%
Return on equity 11.92% 1.15% 6.43%
Return on assets 7.78% 0.93% 2.70%
Return on invested capital 9.27% 0.54% 1.56%

Growth

Metric DRS KTOS Aerospace & Defense median
Revenue growth (TTM) 10.46% 25.50% 18.43%
EPS growth (last fiscal year) 28.75% 18.18% —
Revenue growth, 5-year CAGR 116.77% 12.49% 9.62%
Net income growth, 5-year CAGR 118.05% (22.68%) 0.00%

Health

Metric DRS KTOS Aerospace & Defense median
Debt to equity 0.05 0.04 0.24
Current ratio 1.92 5.54 2.72
Net debt to EBITDA (0.68) (5.44) 1.12

Dividend

Metric DRS KTOS Aerospace & Defense median
Dividend yield — — 1.04%
Payout ratio 0.00 0.00 0.00

Size

Metric DRS KTOS Aerospace & Defense median
Market cap 10.03b 8.84b 2.52b

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