Kratos Defense & Security Solutions, Inc (NASDAQ: KTOS) is having a great start to the trading session this morning, and for good reason. The company announced that it has been chosen to provide services to the United States Navy and Marine Corps. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The new defense contract;
- what we’re seeing from KTOS stock as a result; and
- what we’ll be watching for ahead.
KTOS Announces Defense Contract Award
As mentioned above, Kratos Defense & Security Solutions is having a great day in the market today after announcing a new defense contract. In a press release issued early this morning, the company said that its Defense & Rocket Support Services Division has been awarded a SeaPort Next Generation prime contract. Under the terms of the contract, KTOS will provide Engineering and Program Management support services to the United States Navy and Marine Corps.
According to the press release, SeaPort NxG is the Navy’s primary Multiple-Award Indefinite-Delivery/Indefinite-Quantity (IDIQ) contract for soliciting contractor support services. This particular contract has a five-year base and five-year option ordering period and comes with the potential to drive $5 billion in annual revenue, or $50 billion over the life of the contract.
In a statement, Dave Carter, President of the Defense & Rocket Support Services Division at KTOS, had the following to offer:
This award provides Kratos the opportunity to respond to future Navy Surface Warfare requirements. Kratos looks forward to providing quality Engineering and Program Management services to the U.S. Navy and Marine Corps.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news causes moves. When it comes to Kratos Defense & Security Solutions, the news proved to be great. After all, the new defense contract has the potential to yield a large amount of revenue both on an annual basis and over the term of the 10-year agreement. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:17), KTOS is trading at $15.00 per share after a gain of $1.36 per share or 9.97% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on KTOS. In particular, we’re interested in following the story surrounding the company’s work to fulfill on this new agreement. If all goes well, it will likely become a massive revenue driver. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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