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Axon vs. Kratos Defense: Which Aerospace & Defense Stock Should You Bet On?
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Key Takeaways
AXON's Connected Devices revenues jumped 33% in Q1 2026, driven by TASER and counter-drone demand.
Kratos grew Unmanned Systems and Government Solutions revenues, supported by a $2 billion backlog.
AXON's software growth, collaborations and valuation compare favorably with Kratos' higher costs.
Axon Enterprise, Inc. (AXON - Free Report) and Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) are two prominent names operating in the aerospace and defense equipment industry. As rivals, both companies are engaged in producing highly engineered public security and defense solutions in the United States and internationally.
Both companies have been enjoying significant growth opportunities in the public safety and defense equipment industries on account of growing instances of terrorism and criminal activities and the expansionary U.S. budgetary policy. Let’s take a closer look at their fundamentals, growth prospects and challenges.
The Case for Axon
Axon’s Connected Devices segment is thriving on the back of robust demand for TASER devices. Solid demand for virtual reality training services, TASER 10 products and counter-drone equipment has been supporting the segment’s growth. Segmental revenues surged 33% year over year in the first quarter of 2026, following an increase of 29.1% in 2025.
Axon introduced its next-generation body-worn camera, Axon Body 4, in 2023. With upgraded features such as a bi-directional communications facility and a point-of-view camera module option, this body camera is still generating significant demand, thus bolstering the segment’s growth.
In first-quarter 2026, revenues from the company’s TASER product line increased 19% year over year, driven by TASER 10, while those from the Personal Sensors surged 23%, led by Axon Body 4. Also, revenues from Platform Solutions product line soared 95%, supported by counter-drone equipment, Dedrone.
The Software & Services segment has been benefiting from solid growth in the aggregate number of users to the Axon network. After witnessing a year-over-year 39.6% jump in revenues in 2025, revenues from the segment increased 35% in the first quarter. The segment’s growth has been bolstered by continued momentum in digital evidence management and increased demand for premium add-on features.
AXON remains committed to strategic collaborations with other companies to expand its product offerings and customer base. In October 2025, Axon’s Dedrone business announced its partnership with TYTAN (a leading provider of interceptor systems for Group 3 drones). The integration of TYTAN’s kinetic interceptor technology enhanced Dedrone’s Counter-Unmanned Aircraft Systems (CUAS) mitigation capability, making it suitable to deploy against Group 3 threats.
The company’s Carbyne buyout (in February 2026) also enabled it to create Axon 911, a state-of-the-art, fully integrated solution that is designed to connect callers and responders instantly. The company currently expects revenues to increase approximately 30-32% year over year, higher than the 27-30% predicted earlier.
The Case for Kratos Defense
Kratos Defense is a major unmanned aerial target drone system provider for the U.S. Air Force, Navy, Army and several allied defense agencies. This position has led to multiple recent contracts and partnerships that are expanding its presence in the global UAS market, including a Counter-UAS award in March 2026 and teaming activity tied to the XQ-58A Valkyrie. In first-quarter 2026, Unmanned Systems revenues increased to $82.6 million from $63.1 million a year earlier, driven primarily by Valkyrie-related activity.
Beyond unmanned systems, Kratos Defense is expanding into hypersonics, rocket systems, propulsion and microwave electronics. The company continues to reference orders for hypersonic vehicles such as Erinyes and DarkFury and ongoing development work in its Ghost Works organization. In the first quarter, Kratos Defense highlighted organic growth in parts of Kratos Government Solutions such as Defense Rocket Systems, Turbine Technologies and Microwave Products businesses. Kratos Government Solutions revenues rose to $288.4 million in the quarter from $239.5 million a year earlier.
Such a diverse product portfolio ushers in solid order flows for the company, which, in turn, resulted in a robust consolidated backlog worth $2 billion at the end of the first quarter of 2026. This implies solid revenue generation prospects for the company.
Kratos Defense is also investing in facilities and programs intended to support future production and test needs, including its hypersonic payload integration facility in Crane, IN. The company’s recent Orbit and Nomad acquisitions add capabilities in satellite communications systems and connected mobile operations centers, extending its customer reach within national security.
However, Kratos Defense continues to cite supply-chain disruptions and parts availability as industry issues that can delay material receipts and deliveries. Management’s 2026 outlook explicitly assumes potential manufacturing and supply-chain disruptions, parts shortages and continued cost increases.
Price Performance
Image Source: Zacks Investment Research
In the past month, Axon shares have risen 9.7%, while Kratos Defense stock has lost 3.5%.
The Zacks Consensus Estimate for AXON & KTOS
The Zacks Consensus Estimate for AXON’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 31% and 18.1%, respectively. Although the EPS estimates for 2026 have decreased over the past 60 days, the estimate for 2027 has increased.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KTOS’ 2026 sales and EPS implies year-over-year growth of 29.8% and 29.1%, respectively. KTOS’ EPS estimates have declined for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Axon’s Valuation Attractive Than Kratos Defense
Axon is trading at a forward 12-month price-to-earnings ratio of 45.45X, while Kratos Defense’s forward earnings multiple sits much higher at 63.23X.
Image Source: Zacks Investment Research
Final Take
Kratos Defense’s strength in both segments and strategic investments have been dented by rising costs, expenses and supply-chain disruptions, which might affect its margins and performance. Also, KTOS’ expensive valuation warrants a cautious approach for existing investors.
In contrast, Axon’s market leadership position and strength in TASER, counter-drone equipment and digital evidence management solutions provide it with a competitive advantage to leverage the long-term demand prospects in defense and security market. AXON holds robust prospects due to strong estimates, stock price appreciation, attractive valuation and better prospects for sales growth.
Given these factors, AXON seems to be a better pick for investors than KTOS currently. While AXON currently sports a Zacks Rank #1 (Strong Buy), KTOS has a Zacks Rank #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Axon vs. Kratos Defense: Which Aerospace & Defense Stock Should You Bet On?
Key Takeaways
Axon Enterprise, Inc. (AXON - Free Report) and Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) are two prominent names operating in the aerospace and defense equipment industry. As rivals, both companies are engaged in producing highly engineered public security and defense solutions in the United States and internationally.
Both companies have been enjoying significant growth opportunities in the public safety and defense equipment industries on account of growing instances of terrorism and criminal activities and the expansionary U.S. budgetary policy. Let’s take a closer look at their fundamentals, growth prospects and challenges.
The Case for Axon
Axon’s Connected Devices segment is thriving on the back of robust demand for TASER devices. Solid demand for virtual reality training services, TASER 10 products and counter-drone equipment has been supporting the segment’s growth. Segmental revenues surged 33% year over year in the first quarter of 2026, following an increase of 29.1% in 2025.
Axon introduced its next-generation body-worn camera, Axon Body 4, in 2023. With upgraded features such as a bi-directional communications facility and a point-of-view camera module option, this body camera is still generating significant demand, thus bolstering the segment’s growth.
In first-quarter 2026, revenues from the company’s TASER product line increased 19% year over year, driven by TASER 10, while those from the Personal Sensors surged 23%, led by Axon Body 4. Also, revenues from Platform Solutions product line soared 95%, supported by counter-drone equipment, Dedrone.
The Software & Services segment has been benefiting from solid growth in the aggregate number of users to the Axon network. After witnessing a year-over-year 39.6% jump in revenues in 2025, revenues from the segment increased 35% in the first quarter. The segment’s growth has been bolstered by continued momentum in digital evidence management and increased demand for premium add-on features.
AXON remains committed to strategic collaborations with other companies to expand its product offerings and customer base. In October 2025, Axon’s Dedrone business announced its partnership with TYTAN (a leading provider of interceptor systems for Group 3 drones). The integration of TYTAN’s kinetic interceptor technology enhanced Dedrone’s Counter-Unmanned Aircraft Systems (CUAS) mitigation capability, making it suitable to deploy against Group 3 threats.
The company’s Carbyne buyout (in February 2026) also enabled it to create Axon 911, a state-of-the-art, fully integrated solution that is designed to connect callers and responders instantly. The company currently expects revenues to increase approximately 30-32% year over year, higher than the 27-30% predicted earlier.
The Case for Kratos Defense
Kratos Defense is a major unmanned aerial target drone system provider for the U.S. Air Force, Navy, Army and several allied defense agencies. This position has led to multiple recent contracts and partnerships that are expanding its presence in the global UAS market, including a Counter-UAS award in March 2026 and teaming activity tied to the XQ-58A Valkyrie. In first-quarter 2026, Unmanned Systems revenues increased to $82.6 million from $63.1 million a year earlier, driven primarily by Valkyrie-related activity.
Beyond unmanned systems, Kratos Defense is expanding into hypersonics, rocket systems, propulsion and microwave electronics. The company continues to reference orders for hypersonic vehicles such as Erinyes and DarkFury and ongoing development work in its Ghost Works organization. In the first quarter, Kratos Defense highlighted organic growth in parts of Kratos Government Solutions such as Defense Rocket Systems, Turbine Technologies and Microwave Products businesses. Kratos Government Solutions revenues rose to $288.4 million in the quarter from $239.5 million a year earlier.
Such a diverse product portfolio ushers in solid order flows for the company, which, in turn, resulted in a robust consolidated backlog worth $2 billion at the end of the first quarter of 2026. This implies solid revenue generation prospects for the company.
Kratos Defense is also investing in facilities and programs intended to support future production and test needs, including its hypersonic payload integration facility in Crane, IN. The company’s recent Orbit and Nomad acquisitions add capabilities in satellite communications systems and connected mobile operations centers, extending its customer reach within national security.
However, Kratos Defense continues to cite supply-chain disruptions and parts availability as industry issues that can delay material receipts and deliveries. Management’s 2026 outlook explicitly assumes potential manufacturing and supply-chain disruptions, parts shortages and continued cost increases.
Price Performance
Image Source: Zacks Investment Research
In the past month, Axon shares have risen 9.7%, while Kratos Defense stock has lost 3.5%.
The Zacks Consensus Estimate for AXON & KTOS
The Zacks Consensus Estimate for AXON’s 2026 sales and earnings per share (EPS) implies year-over-year growth of 31% and 18.1%, respectively. Although the EPS estimates for 2026 have decreased over the past 60 days, the estimate for 2027 has increased.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KTOS’ 2026 sales and EPS implies year-over-year growth of 29.8% and 29.1%, respectively. KTOS’ EPS estimates have declined for both 2026 and 2027 over the past 60 days.
Image Source: Zacks Investment Research
Axon’s Valuation Attractive Than Kratos Defense
Axon is trading at a forward 12-month price-to-earnings ratio of 45.45X, while Kratos Defense’s forward earnings multiple sits much higher at 63.23X.
Image Source: Zacks Investment Research
Final Take
Kratos Defense’s strength in both segments and strategic investments have been dented by rising costs, expenses and supply-chain disruptions, which might affect its margins and performance. Also, KTOS’ expensive valuation warrants a cautious approach for existing investors.
In contrast, Axon’s market leadership position and strength in TASER, counter-drone equipment and digital evidence management solutions provide it with a competitive advantage to leverage the long-term demand prospects in defense and security market. AXON holds robust prospects due to strong estimates, stock price appreciation, attractive valuation and better prospects for sales growth.
Given these factors, AXON seems to be a better pick for investors than KTOS currently. While AXON currently sports a Zacks Rank #1 (Strong Buy), KTOS has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank stocks here.