Kratos Defense & Security Solutions (KTOS)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 16,300 | -8,900 | -34,100 | 500 | 79,600 |
| Total stockholders’ equity | US$ in thousands | 1,353,200 | 976,000 | 936,300 | 945,100 | 925,300 |
| ROE | 1.20% | -0.91% | -3.64% | 0.05% | 8.60% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $16,300K ÷ $1,353,200K
= 1.20%
The analysis of Kratos Defense & Security Solutions’ return on equity (ROE) over the period from December 31, 2020, to December 31, 2024, indicates a trajectory marked by significant fluctuations and a general trend toward stabilization in recent periods.
At the end of 2020, the company's ROE was notably robust at 8.60%, suggesting effective utilization of shareholders' equity and strong profitability during that year. However, this performance sharply declined in 2021, with the ROE plummeting to a modest 0.05%. This drastic reduction signals a substantial deterioration in profitability metrics or increased equity base relative to net income during that period.
The subsequent year, 2022, saw a deterioration into negative territory with an ROE of -3.64%. This negative value indicates that the company experienced net losses or a decline in net income significant enough to offset shareholders' equity, thereby eroding equity value or reflecting operational challenges.
In 2023, the negative trend persisted, with the ROE at -0.91%. Although this reflects some improvement from the previous year’s decline, it remains below zero, indicating continued challenges in generating positive returns on shareholder investments.
By 2024, the ROE improved to 1.20%, crossing into positive territory. This rebound suggests a period of recovery wherein the company managed to generate net income sufficient to produce a modest return on equity. Although the current level remains relatively low, this positive shift may imply initial signs of operational or financial stabilization.
Overall, the ROE trend over these years illustrates a period of significant volatility, characterized by a sharp decline from relatively strong profitability in 2020 to negative returns in the subsequent years, followed by signs of recovery in 2024. This pattern indicates that the company has faced considerable challenges in maintaining consistent profitability but may be on a path to marginal improvement, contingent on ongoing operational adjustments and strategic initiatives.
Peer comparison
Dec 31, 2024