Just noticed something weird with Kratos Defense stock today - it actually dropped like 5% even though KeyBanc's analyst just bumped his price target up to $130 this morning. That's a nearly 50% increase in the target, so you'd think the stock would pop, right? But nope, it's going the other way. So what's the deal here? Well, on the surface the thesis makes sense. The space and defense sectors are booming right now with solid growth expected through 2026. Kratos has been riding that wave pretty well too - they've grown revenue from under $750 million five years ago to around $1.3 billion in the last year. That's solid growth. But here's where I started scratching my head. Yeah, revenue is growing, but the profitability story is kind of a mess. Last year they only made $20 million in net income, which is actually way down from the $79.6 million they earned back in 2020. Even worse, their free cash flow is negative $93.3 million over the past 12 months. So they're still burning cash despite all that revenue growth. Now, analysts are forecasting Kratos could hit $60 million in earnings by 2026, which would triple current profits. That would be great if it happens. But even at that level, with the stock's current valuation sitting at a $20 billion market cap, you're looking at paying 333 times forward earnings. That's just insane for a company that's still not profitable on a cash basis. I get why some people are bullish on the space and defense tailwinds, but the valuation math just doesn't add up for me. At these prices, I'd probably be looking elsewhere.