Kratos Defense and Security Solutions (KTOS) is a smaller Defense name seeing calls accumulate this week with a 8/28 late day buyer for 500 Feb $22.50 calls at $2.85 which added to buyers on Monday and follows the 8/23 buyers of over 1100 Feb $25 calls for $1.85. KTOS also has seen insider buying this month from its CEO who bought over $500K in stock between $20-$21 and was the first insider purchases since 2022. 

KTOS is a $3.4B small cap defense industrial that trades at 50x earnings, 2.9x sales but sees 10%+ sales growth going out to FY26. Kratos operates as a technology company that addresses the defense, national security, and commercial markets. It operates through two segments, Kratos Government Solutions and Unmanned Systems. Shares have been strong the past year up 43% but only recently nearing a big breakout on the weekly chart that can clear the 23 potentially for a move up towards 27.50 where a higher volume node sits from 2021. The recent dip to 18.50 was a perfect test of its long term POC volume support. 

KTOS was started Outperform at JMP with a $27 target and highlighting a large total addressable market spanning unmanned systems, space and satellites, turbine technologies, microwave electronics, and more, as well as strong product bases in rapidly growing new defense markets.