KTOS - Up is not an if, but whenBig resistance at $46 (today) and $33 (we broke through this May 2025).
Now need to see if either:
(a) $33 will be support -- we drop down 25-30% to re-test and bounce off this before going higher
OR
(b) $46 resistance gets broken and becomes new support, to what is effectively all-time-highs (ignoring pre-2006 levels)
Why is Up most likely?
> We established higher lows in 2015, 2020, 2023 (3 points makes a trend, not a line)
> Revenue is increasing >10%/year. Not great, but not bad. Point is, it's going up!
What's the downside on KTOS?
> $10/share is proper support if $33 breaks --> High Risk/Reward
My plan for investing:
> Wait for $35/share (25% decline from today). See if we back-test and can confirm support. Could enter a small position here with a limit order.
> If we break out >$50 from here, I'd be convinced I've missed the run up from $10 in December 2022. Don't need to touch it until something changes
Why I don't like KTOS as much as AVAV
> KTOS revenue growth rate is slower
> KTOS profit margins are lower
> KTOS has higher US and higher US Government exposure (AVAV more diversified)
> KTOS has $280M debt and $260M cash on $1.15B annual revenue and $0-50M annual cash flow;
AVAV has $65M debt and $40M cash on $820M revenue* and $15-100M annual cash flow
*Pre-acquisitions
I need to see proven ability to either (ideally both): grow revenue faster, achieve higher margins or cash flow from operations. AVAV has done this in the last year.
