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KTOS vs. ESLT: Which Defense Stock Leads the Unmanned Systems Boom?
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Key Takeaways
KTOS posts sharp Q3 unmanned systems growth with revenues up 35.8% and operating income up 575%.
Kratos Defense expands global UAS presence through new contracts and next-gen drone investments.
KTOS shows strong interest coverage of 11.8 with shares up 183.2% over the past year.
Governments worldwide are expanding their defense budgets to modernize and strengthen military capabilities. This surge in spending is directing investor attention toward defense contractors positioned in high-growth areas of military technology. Companies like Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) and Elbit Systems (ESLT - Free Report) are benefiting from this trend due to their strong portfolios in advanced systems, such as unmanned aerial vehicles, autonomous platforms, missile defense technologies and next-generation surveillance solutions. Their strategic alignment with priority defense initiatives makes them increasingly attractive to investors seeking exposure to long-term defense modernization and security-driven demand.
Large defense contractors and governments are pouring significant capital into autonomous defense technologies and military drones as modern warfare increasingly depends on speed, precision and reduced human exposure. Unmanned systems can carry out surveillance, reconnaissance, and strike missions without putting soldiers directly in harm’s way, making them invaluable in high-risk or contested environments.
These platforms also integrate advanced sensors, artificial intelligence-driven targeting, and real-time data links, enabling commanders to gather superior intelligence and make faster, more informed decisions on the battlefield. As a result, military drones and autonomous systems not only enhance situational awareness but also improve mission efficiency, responsiveness and overall operational effectiveness.
The Case for KTOS Stock
Kratos Defense is experiencing strong growth in its unmanned systems business, supported by rising defense contracts and demand for cost-effective, high-performance drones. In the third quarter of 2025, KTOS’ unmanned systems segment revenues jumped 35.8% year over year, while operating income surged 575%, reflecting better scale and profitability.
As a leading provider of aerial target drones for the U.S. military and allied nations, Kratos continues to secure new contracts and partnerships that expand its global UAS presence. The company is also investing in next-generation platforms, including the Thanatos, Apollo, and a fifth-generation jet drone, along with advancements in hypersonics. These efforts, combined with rapid development cycles and close customer collaboration, position KTOS well for long-term growth and alignment with evolving defense priorities.
The Case for ESLT Stock
Elbit Systems is seeing strong momentum in its unmanned systems business, driven by rising demand from global defense and security agencies. Its portfolio spans a broad range of unmanned technologies, including mini-UAS for tactical use, MALE-class drones for extended missions and unmanned naval platforms. The company also produces unmanned ground vehicles and surface vessels for various operational needs, from surveillance and reconnaissance to border protection and combat support.
Recently, Elbit Systems has won several major multi-year international contracts for its unmanned offerings — one valued at roughly $2.3 billion — highlighting the robust market demand and adding substantial long-term revenue visibility.
Let's compare the stocks' fundamentals to determine which one is a better investment option at present.
How Do Zacks Estimates Compare for KTOS & ESLT?
The Zacks Consensus Estimate for Kratos Defense’s 2025 and 2026 earnings per share (EPS) indicates an increase of 4.08% and 38.95%, respectively, year over year.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Elbit Systems’ EPS indicates an increase of 39.27% and 16.6% in 2025 and 2026, respectively, year over year.
Image Source: Zacks Investment Research
ESLT’s Valuation More Attractive Than KTOS
KTOS shares trade at a forward 12-month Price/Sales (P/S F12M) multiple of 7.98 compared with ESLT’s 2.41X, making ESLT relatively more attractive from a valuation standpoint.
Debt Position of KTOS & ESLT
Currently, total debt to capital for KTOS is nil, while that of ESLT is 7.61%.
The time-to-interest earned ratio for Kratos Defense and Elbit Systems at the end of the third quarter of 2025 was 11.8 and 4.1, respectively. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
KTOS & ESLT’s Price Performance
In the past year, shares of Kratos Defense and Elbit Systems have risen 183.2% and 86.9%, respectively.
KTOS or ESLT: Which Is a Better Choice Now?
Both Kratos Defense and Elbit Systems are involved in advanced military technology, especially in the fast-growing unmanned systems segment. Elbit Systems is known for its broad defense technology portfolio, and one of its strongest areas is UAVs. Since Kratos Defense is also a major player in unmanned aerial systems, particularly tactical drones and target drones, the comparison naturally centers on both companies’ strengths in unmanned defense tech.
However, our choice at the moment is Kratos Defense, given its better price performance and better management than Elbit Systems.
Image: Bigstock
KTOS vs. ESLT: Which Defense Stock Leads the Unmanned Systems Boom?
Key Takeaways
Governments worldwide are expanding their defense budgets to modernize and strengthen military capabilities. This surge in spending is directing investor attention toward defense contractors positioned in high-growth areas of military technology. Companies like Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) and Elbit Systems (ESLT - Free Report) are benefiting from this trend due to their strong portfolios in advanced systems, such as unmanned aerial vehicles, autonomous platforms, missile defense technologies and next-generation surveillance solutions. Their strategic alignment with priority defense initiatives makes them increasingly attractive to investors seeking exposure to long-term defense modernization and security-driven demand.
Large defense contractors and governments are pouring significant capital into autonomous defense technologies and military drones as modern warfare increasingly depends on speed, precision and reduced human exposure. Unmanned systems can carry out surveillance, reconnaissance, and strike missions without putting soldiers directly in harm’s way, making them invaluable in high-risk or contested environments.
These platforms also integrate advanced sensors, artificial intelligence-driven targeting, and real-time data links, enabling commanders to gather superior intelligence and make faster, more informed decisions on the battlefield. As a result, military drones and autonomous systems not only enhance situational awareness but also improve mission efficiency, responsiveness and overall operational effectiveness.
The Case for KTOS Stock
Kratos Defense is experiencing strong growth in its unmanned systems business, supported by rising defense contracts and demand for cost-effective, high-performance drones. In the third quarter of 2025, KTOS’ unmanned systems segment revenues jumped 35.8% year over year, while operating income surged 575%, reflecting better scale and profitability.
As a leading provider of aerial target drones for the U.S. military and allied nations, Kratos continues to secure new contracts and partnerships that expand its global UAS presence. The company is also investing in next-generation platforms, including the Thanatos, Apollo, and a fifth-generation jet drone, along with advancements in hypersonics. These efforts, combined with rapid development cycles and close customer collaboration, position KTOS well for long-term growth and alignment with evolving defense priorities.
The Case for ESLT Stock
Elbit Systems is seeing strong momentum in its unmanned systems business, driven by rising demand from global defense and security agencies. Its portfolio spans a broad range of unmanned technologies, including mini-UAS for tactical use, MALE-class drones for extended missions and unmanned naval platforms. The company also produces unmanned ground vehicles and surface vessels for various operational needs, from surveillance and reconnaissance to border protection and combat support.
Recently, Elbit Systems has won several major multi-year international contracts for its unmanned offerings — one valued at roughly $2.3 billion — highlighting the robust market demand and adding substantial long-term revenue visibility.
Let's compare the stocks' fundamentals to determine which one is a better investment option at present.
How Do Zacks Estimates Compare for KTOS & ESLT?
The Zacks Consensus Estimate for Kratos Defense’s 2025 and 2026 earnings per share (EPS) indicates an increase of 4.08% and 38.95%, respectively, year over year.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Elbit Systems’ EPS indicates an increase of 39.27% and 16.6% in 2025 and 2026, respectively, year over year.
Image Source: Zacks Investment Research
ESLT’s Valuation More Attractive Than KTOS
KTOS shares trade at a forward 12-month Price/Sales (P/S F12M) multiple of 7.98 compared with ESLT’s 2.41X, making ESLT relatively more attractive from a valuation standpoint.
Debt Position of KTOS & ESLT
Currently, total debt to capital for KTOS is nil, while that of ESLT is 7.61%.
The time-to-interest earned ratio for Kratos Defense and Elbit Systems at the end of the third quarter of 2025 was 11.8 and 4.1, respectively. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
KTOS & ESLT’s Price Performance
In the past year, shares of Kratos Defense and Elbit Systems have risen 183.2% and 86.9%, respectively.
KTOS or ESLT: Which Is a Better Choice Now?
Both Kratos Defense and Elbit Systems are involved in advanced military technology, especially in the fast-growing unmanned systems segment. Elbit Systems is known for its broad defense technology portfolio, and one of its strongest areas is UAVs. Since Kratos Defense is also a major player in unmanned aerial systems, particularly tactical drones and target drones, the comparison naturally centers on both companies’ strengths in unmanned defense tech.
However, our choice at the moment is Kratos Defense, given its better price performance and better management than Elbit Systems.
Both stocks carry a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.