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Global defense spending is experiencing significant growth as governments modernize military capabilities, particularly in autonomous technologies and military drones. Companies like Kratos Defense & Security Solutions, Inc. (KTOS) and Elbit Systems (ESLT) are benefitting from this trend, with Kratos reporting a 35.8% year-over-year revenue increase in its unmanned systems segment for Q3 2025, and operating income surging 575%.
Elbit Systems has secured several large contracts, including a major one valued at $2.3 billion, reflecting robust demand for its unmanned technologies. In terms of earnings projections, Zacks Consensus Estimates indicate a 4.08% increase for KTOS in 2025 and 39.27% for ESLT, with both stocks carrying a Zacks Rank of #3 (Hold) currently.
In 2025, KTOS shares are trading at a Price/Sales multiple of 7.98, compared to ESLT’s 2.41, which may make Elbit Systems more attractive from a valuation standpoint. Over the past year, shares of Kratos Defense have risen 183.2%, while Elbit Systems has increased 86.9%.
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