Kratos Defense & Security Solutions (NASDAQ: KTOS) and Axon Enterprise (NASDAQ:AAXN) are both small-cap industrials companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, analyst recommendations, risk, profitability, institutional ownership and earnings.
Earnings and Valuation
This table compares Kratos Defense & Security Solutions and Axon Enterprise’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Kratos Defense & Security Solutions||$668.70 million||1.75||-$60.50 million||($0.31)||-36.55|
|Axon Enterprise||$268.24 million||5.44||$17.29 million||$0.25||110.24|
Axon Enterprise has lower revenue, but higher earnings than Kratos Defense & Security Solutions. Kratos Defense & Security Solutions is trading at a lower price-to-earnings ratio than Axon Enterprise, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current recommendations and price targets for Kratos Defense & Security Solutions and Axon Enterprise, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kratos Defense & Security Solutions||0||4||5||0||2.56|
Kratos Defense & Security Solutions currently has a consensus target price of $13.00, suggesting a potential upside of 14.74%. Axon Enterprise has a consensus target price of $30.00, suggesting a potential upside of 8.85%. Given Kratos Defense & Security Solutions’ stronger consensus rating and higher probable upside, research analysts clearly believe Kratos Defense & Security Solutions is more favorable than Axon Enterprise.
Volatility and Risk
Kratos Defense & Security Solutions has a beta of 1.81, suggesting that its share price is 81% more volatile than the S&P 500. Comparatively, Axon Enterprise has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500.
This table compares Kratos Defense & Security Solutions and Axon Enterprise’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kratos Defense & Security Solutions||-3.39%||-1.21%||-0.45%|
Insider and Institutional Ownership
71.4% of Kratos Defense & Security Solutions shares are owned by institutional investors. Comparatively, 95.7% of Axon Enterprise shares are owned by institutional investors. 17.9% of Kratos Defense & Security Solutions shares are owned by insiders. Comparatively, 3.9% of Axon Enterprise shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
Axon Enterprise beats Kratos Defense & Security Solutions on 8 of the 14 factors compared between the two stocks.
About Kratos Defense & Security Solutions
Kratos Defense & Security Solutions, Inc. is a technology, intellectual property and proprietary product and solution company focused on the United States and its allies’ national security. The Kratos Government Solutions segment includes the operations of Defense Rocket Support Services, Microwave Electronics Division, Technical and Training Solutions, and Modular Systems, which provide technology-based defense solutions, involving products and services, with the focus relating to the nation’s Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance and Reconnaissance requirements. The Unmanned Systems segment includes its unmanned aerial, ground, seaborne and command, control and communications system business. The Public Safety & Security segment provides integrated solutions for homeland security, public safety, critical infrastructure, and security and surveillance systems for government and commercial applications.
About Axon Enterprise
Axon Enterprise, Inc., formerly TASER International, Inc., is engaged in development, manufacture and sale of conducted electrical weapons (CEWs) for use by law enforcement, military, corrections and private security personnel, and by private individuals for personal defense. It is also engaged in development of connected wearable on-officer cameras. It operates through two segments: the sale of CEWs, accessories, and other related products and services (the TASER Weapons segment), and the Axon business, focused on devices, wearables, applications, cloud and mobile products (the Axon segment). Its TASER Weapons product line includes TASER X26P, TASER X2, TASER C2, TASER Pulse and Replacement Cartridges. Its hardware products include Axon Body 2, Axon Flex, Axon Fleet, Axon Interview, Axon Signal and Axon Dock. Its Axon software and mobile technologies include Evidence.com, Evidence.com for Prosecutors, Evidence Sync, Axon Capture, Axon View, Axon Five, Axon Convert and Axon Detect.
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