We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Kratos Defense vs. Draganfly: Which Drone Stock Has More Potential?
Read MoreHide Full Article
Key Takeaways
Kratos Defense's Unmanned Systems revenues reached $79.1 million in Q2 2026, with $374.6 million backlog.
KTOS targets roughly 10% organic growth in 2026 and plans to expand Valkyrie output by early 2028.
DPRO secured an FAA exemption for heavier-payload missions, expanding potential commercial and defense uses.
Both Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) and Draganfly (DPRO - Free Report) have exposure to the rapidly expanding defense drone, unmanned systems and counter-unmanned aircraft systems (C-UAS) markets. Rising defense spending, growing demand for autonomous systems, and the increasing importance of low-cost unmanned platforms are creating opportunities for companies developing next-generation military technologies.
The similarities between KTOS and DPRO therefore come primarily from their exposure to the same broad structural trend: the increasing use of unmanned and autonomous systems in modern warfare. The difference is the stage at which each company is participating in that opportunity. Kratos Defense is a much larger, more diversified defense technology company with established programs and significant revenue. Draganfly represents a smaller, more speculative play on the potential expansion of low-cost tactical drones.
Let's compare the stocks' fundamentals to determine which is the better investment option right now.
Factors Acting in Favor of KTOS Stock
Kratos Defense’s Unmanned Systems business is expanding as demand grows for tactical drones and autonomous defense systems. In second-quarter 2026, revenues increased to $79.1 million, driven primarily by XQ-58A Valkyrie activity, while the segment turned profitable with $1.2 million in operating income and ended the quarter with $374.6 million in backlog. KTOS is also developing programs such as Athena and Air Wolf and plans to expand Valkyrie production to 35-40 aircraft annually by early 2028. With management targeting roughly 10% organic growth in 2026, increased production capacity and international opportunities could make Unmanned Systems a larger contributor to KTOS’ overall growth.
Beyond unmanned systems, Kratos is expanding in hypersonics, rocket systems, propulsion and microwave electronics. The company continues to cite orders for hypersonic vehicles and ongoing development work within its Ghost Works organization. In second-quarter 2026, Kratos highlighted organic growth in parts of Kratos Government Solutions such as Defense Rocket Systems, Turbine Technologies and Microwave Products, which grew 50.2%, 43.3% and 29.5%, respectively.
Factors Acting in Favor of DPRO Stock
Draganfly is focused more directly on commercial and defense drone platforms and autonomous systems. The company has increased its focus on defense applications as military customers seek lower-cost, rapidly deployable unmanned systems. Its recent Canadian Armed Forces opportunities are particularly significant because they could provide a pathway toward larger-scale production and demonstrate demand for its tactical ISR drone capabilities.
Recently, Draganfly secured an FAA Section 44807 exemption for its Heavy Lift drone platform. The exemption allows the Heavy Lift drone to operate in the United States at takeoff weights above the standard 55-pound Part 107 limit, opening the door to commercial missions that require substantially heavier payloads. For Draganfly, this could expand the addressable market beyond smaller drones into defense logistics, emergency response, medical supply delivery, infrastructure inspection, and industrial applications, where customers may need to carry heavier equipment, sensors, or supplies.
How Do Zacks Estimates Compare for KTOS & DPRO?
The Zacks Consensus Estimate for Kratos Defense’s 2026 and 2027 earnings per share (EPS) indicates an increase of 50.91% and 37.06%, respectively, year over year.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Draganfly’s EPS indicates year-over-year growth of 17% in 2026 and 7.23% in 2027.
Image Source: Zacks Investment Research
Valuation for KTOS & DPRO
KTOS shares trade at a forward 12-month Price/Sales (P/S F12M) of 4.23X compared with DPRO’s 1.37X.
Image Source: Zacks Investment Research
Debt Position of KTOS & DPRO
Currently, both Kratos Defense and Draganfly have a total debt-to-capital ratio of zero.
The time-to-interest earned ratio for Kratos Defense at the end of second-quarter 2026 was negative, while that for Draganfly was 31.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
KTOS & DPRO’s Price Performance
In the past year, shares of Kratos Defense and Draganfly have lost 45.6% and 16.7%, respectively.
Image Source: Zacks Investment Research
KTOS or DPRO: Which Is the More Compelling Stock Now?
Kratos Defense is expanding across unmanned systems, hypersonics, rocket systems, propulsion and advanced defense technologies, supported by growing demand and increasing production opportunities. Draganfly is expanding its defense and commercial drone opportunities through military contracts and regulatory approval for heavier-payload operations across multiple applications.
Our current choice is Kratos Defense, given its strong near-term earnings growth and better debt management than Draganfly. KTOS carries a Zacks Rank #3 (Hold) and DPRO has a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Kratos Defense vs. Draganfly: Which Drone Stock Has More Potential?
Key Takeaways
Both Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) and Draganfly (DPRO - Free Report) have exposure to the rapidly expanding defense drone, unmanned systems and counter-unmanned aircraft systems (C-UAS) markets. Rising defense spending, growing demand for autonomous systems, and the increasing importance of low-cost unmanned platforms are creating opportunities for companies developing next-generation military technologies.
The similarities between KTOS and DPRO therefore come primarily from their exposure to the same broad structural trend: the increasing use of unmanned and autonomous systems in modern warfare. The difference is the stage at which each company is participating in that opportunity. Kratos Defense is a much larger, more diversified defense technology company with established programs and significant revenue. Draganfly represents a smaller, more speculative play on the potential expansion of low-cost tactical drones.
Let's compare the stocks' fundamentals to determine which is the better investment option right now.
Factors Acting in Favor of KTOS Stock
Kratos Defense’s Unmanned Systems business is expanding as demand grows for tactical drones and autonomous defense systems. In second-quarter 2026, revenues increased to $79.1 million, driven primarily by XQ-58A Valkyrie activity, while the segment turned profitable with $1.2 million in operating income and ended the quarter with $374.6 million in backlog. KTOS is also developing programs such as Athena and Air Wolf and plans to expand Valkyrie production to 35-40 aircraft annually by early 2028. With management targeting roughly 10% organic growth in 2026, increased production capacity and international opportunities could make Unmanned Systems a larger contributor to KTOS’ overall growth.
Beyond unmanned systems, Kratos is expanding in hypersonics, rocket systems, propulsion and microwave electronics. The company continues to cite orders for hypersonic vehicles and ongoing development work within its Ghost Works organization. In second-quarter 2026, Kratos highlighted organic growth in parts of Kratos Government Solutions such as Defense Rocket Systems, Turbine Technologies and Microwave Products, which grew 50.2%, 43.3% and 29.5%, respectively.
Factors Acting in Favor of DPRO Stock
Draganfly is focused more directly on commercial and defense drone platforms and autonomous systems. The company has increased its focus on defense applications as military customers seek lower-cost, rapidly deployable unmanned systems. Its recent Canadian Armed Forces opportunities are particularly significant because they could provide a pathway toward larger-scale production and demonstrate demand for its tactical ISR drone capabilities.
Recently, Draganfly secured an FAA Section 44807 exemption for its Heavy Lift drone platform. The exemption allows the Heavy Lift drone to operate in the United States at takeoff weights above the standard 55-pound Part 107 limit, opening the door to commercial missions that require substantially heavier payloads. For Draganfly, this could expand the addressable market beyond smaller drones into defense logistics, emergency response, medical supply delivery, infrastructure inspection, and industrial applications, where customers may need to carry heavier equipment, sensors, or supplies.
How Do Zacks Estimates Compare for KTOS & DPRO?
The Zacks Consensus Estimate for Kratos Defense’s 2026 and 2027 earnings per share (EPS) indicates an increase of 50.91% and 37.06%, respectively, year over year.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Draganfly’s EPS indicates year-over-year growth of 17% in 2026 and 7.23% in 2027.
Image Source: Zacks Investment Research
Valuation for KTOS & DPRO
KTOS shares trade at a forward 12-month Price/Sales (P/S F12M) of 4.23X compared with DPRO’s 1.37X.
Image Source: Zacks Investment Research
Debt Position of KTOS & DPRO
Currently, both Kratos Defense and Draganfly have a total debt-to-capital ratio of zero.
The time-to-interest earned ratio for Kratos Defense at the end of second-quarter 2026 was negative, while that for Draganfly was 31.1. The ratio, being greater than one, reflects the company’s ability to meet future interest obligations without difficulties.
KTOS & DPRO’s Price Performance
In the past year, shares of Kratos Defense and Draganfly have lost 45.6% and 16.7%, respectively.
Image Source: Zacks Investment Research
KTOS or DPRO: Which Is the More Compelling Stock Now?
Kratos Defense is expanding across unmanned systems, hypersonics, rocket systems, propulsion and advanced defense technologies, supported by growing demand and increasing production opportunities. Draganfly is expanding its defense and commercial drone opportunities through military contracts and regulatory approval for heavier-payload operations across multiple applications.
Our current choice is Kratos Defense, given its strong near-term earnings growth and better debt management than Draganfly. KTOS carries a Zacks Rank #3 (Hold) and DPRO has a Zacks Rank #4 (Sell) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.