In the current market session, Kratos Defense &amp; Security Inc. (NASDAQ:KTOS) share price is at $87.11, after a 3.50% spike. Moreover, over the past month, the stock decreased by 31.07%, but in the past year, increased by 233.09%. Shareholders might be interested in knowing whether the stock is overvalued, even if the company is performing up to par in the current session.
<img src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2026/1771005621_0.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Past Year Chart" width="600" height="600" original-src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2026/1771005621_0.png"/>
<h3>Kratos Defense &amp; Security P/E Compared to Competitors</h3>
The P/E ratio measures the current share price to the company's EPS. It is used by long-term investors to analyze the company's current performance against it's past earnings, historical data and aggregate market data for the industry or the indices, such as S&amp;P 500. A higher P/E indicates that investors expect the company to perform better in the future, and the stock is probably overvalued, but not necessarily. It also could indicate that investors are willing to pay a higher share price currently, because they expect the company to perform better in the upcoming quarters. This leads investors to also remain optimistic about rising dividends in the future. 
Kratos Defense &amp; Security has a better P/E ratio of 669.62 than the aggregate P/E ratio of 93.45 of the Aerospace &amp; Defense industry. Ideally, one might believe that Kratos Defense &amp; Security Inc. might perform better in the future than it's industry group, but it's probable that the stock is overvalued. 
<img src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2026/1771005621_1.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Guage" width="700" height="500" original-src="https://imageproxy.pbkrs.com/https://www.benzinga.com/files/images/story/2026/1771005621_1.png"/>
In summary, while the price-to-earnings ratio is a valuable tool for investors to evaluate a company's market performance, it should be used with caution. A low P/E ratio can be an indication of undervaluation, but it can also suggest weak growth prospects or financial instability. Moreover, the P/E ratio is just one of many metrics that investors should consider when making investment decisions, and it should be evaluated alongside other financial ratios, industry trends, and qualitative factors. By taking a comprehensive approach to analyzing a company's financial health, investors can make well-informed decisions that are more likely to lead to successful outcomes.

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Kratos Defense & Security Inc. (NASDAQ:KTOS) shares are currently priced at $87.11, reflecting a 3.50% increase. Despite a 31.07% decline over the past month, the stock has risen 233.09% in the last year. The company's P/E ratio stands at 669.62, significantly higher than the Aerospace & Defense industry's average of 93.45, suggesting potential overvaluation. While a high P/E may indicate expected future performance, investors should consider it alongside other financial metrics and industry trends for informed decision-making.

A Look Into Kratos Defense & Security Inc's Price Over Earnings