Kadant Inc (KAI)
NYSE:KAI
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Kadant
(NYSE:KAI)
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Rating:69Neutral
Price Target:
$342.00
▲(8.07% Upside)
Action:DowngradedDate:03/25/26
The score is driven primarily by strong underlying financial performance (profitability and cash flow durability). This is tempered by a weaker near-term technical picture and a relatively expensive valuation; recent positive corporate updates and an accretive-looking acquisition direction provide some support.
Positive Factors
Cash generation
Kadant converts earnings into cash reliably (FCF roughly 0.8–0.9x of net income recently), with the latest year showing higher free cash flow. Durable cash generation underpins reinvestment in products, aftermarket support, and M&A, giving structural financial flexibility over months.
Negative Factors
Weak revenue trend
Recent top-line trends show weakness, with revenue growth negative in the provided metrics and organic declines noted. Sustained weak top-line limits operating leverage, constrains reinvestment, and makes it harder to expand aftermarket base and margins over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Kadant converts earnings into cash reliably (FCF roughly 0.8–0.9x of net income recently), with the latest year showing higher free cash flow. Durable cash generation underpins reinvestment in products, aftermarket support, and M&A, giving structural financial flexibility over months.
Read all positive factors
Kadant (KAI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.82B
Dividend Yield0.46%
Average Volume (3M)145.77K
Price to Earnings (P/E)33.1
Beta (1Y)1.29
Revenue Growth-0.96%
EPS Growth-11.55%
CountryUS
Employees3,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.27
Shares Outstanding11,789,023
10 Day Avg. Volume195,513
30 Day Avg. Volume145,769
Financial Highlights & Ratios
PEG Ratio-3.70
Price to Book (P/B)3.40
Price to Sales (P/S)3.20
P/FCF Ratio21.85
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue3.87
Enterprise Value/Gross Profit8.55
Enterprise Value/Ebitda18.15
Forecast
1Y Price Target
$341.50Price Target Upside7.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)11.62
Revenue Forecast (FY)$1.17B
Kadant Business Overview & Revenue Model
Company Description
Kadant Inc. supplies technologies and engineered systems worldwide. It operates through three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handling systems...
How the Company Makes Money
Kadant makes money primarily by selling industrial equipment and systems and by generating recurring aftermarket revenue from parts and services tied to its installed base. (1) Capital equipment/systems sales: The company sells engineered machiner...
Kadant Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Neutral
The call reflects a mixed but measured tone. There are clear operating strengths: record Q4 revenue, a record aftermarket mix, strong cash flow and successful recent acquisitions. Segment-level improvements and conservative but upgradeable 2026 guidance are positives. Offsetting these are meaningful headwinds: weaker capital activity (capital revenue down 16% for the year), tariff-driven margin pressure, higher SG&A and tax impacts, rising net debt and an expected leverage increase tied to acquisitions, plus timing uncertainty for large capital orders. Management is cautious and focused on cash generation and integration upside, resulting in an outlook that balances tangible operational wins against persistent macro and timing risks.Positive Updates
Record Q4 and Aftermarket Strength
Q4 revenue reached a record $286.2M, up 11% year-over-year, driven by acquisitions and a record aftermarket parts business; aftermarket parts comprised ~70% of Q4 revenue (71% for the full year). Bookings increased 12% in Q4 versus prior year.
Negative Updates
Full-Year Adjusted EPS and Adjusted EBITDA Declines
Full-year adjusted EPS decreased from $10.28 (2024) to $9.26 in 2025 (down $1.02). Full-year adjusted EBITDA declined 6% to $216.3M (20.6% of revenue) from $229.7M (21.8% of revenue) in 2024, driven largely by lower capital revenue.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Q4 and Aftermarket Strength
Q4 revenue reached a record $286.2M, up 11% year-over-year, driven by acquisitions and a record aftermarket parts business; aftermarket parts comprised ~70% of Q4 revenue (71% for the full year). Bookings increased 12% in Q4 versus prior year.
Read all positive updates
Company Guidance
Kadant guided fiscal 2026 revenue of $1.160–$1.185 billion and adjusted EPS of $10.40–$10.75 (excludes $0.13 of acquired profit/inventory amortization); after management will add back recurring intangible amortization (forecast $33.4M pre‑tax / $25.1M net of tax, $2.13 per share) the adjusted‑EPS range becomes $12.53–$12.88. First‑quarter 2026 guidance is $270–$280 million of revenue and adjusted EPS $1.78–$1.88 (excl $0.09), which increases to $2.31–$2.41 after the amortization add‑back. Management expects gross margins of ~45.2–45.7%, SG&A of 27.7–28.3% of revenue, R&D ~1.4% of revenue, net interest expense of ~$15.5–$16.0M (excludes any incremental interest from the proposed acquisition), a recurring tax rate of ~27.3–27.8%, depreciation & amortization of ~$60–61M, and CapEx of $23–27M. The guide assumes roughly flat to +1–3% organic growth, excludes the pending voestalpine acquisition (expected to close in Q1 and would push leverage to just above 2), treats Q1 as the weakest quarter due to delayed capital bookings, and leaves upside if several large customer proposals convert to orders.Kadant Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
70
Positive
Cash Flow
82
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.05B | 1.05B | 957.67M | 904.74M | 786.58M |
| Gross Profit | 475.73M | 466.15M | 416.31M | 389.56M | 337.37M |
| EBITDA | 208.51M | 222.69M | 200.71M | 207.05M | 151.18M |
| Net Income | 101.97M | 111.60M | 116.07M | 120.93M | 84.04M |
Balance Sheet | |||||
| Total Assets | 1.71B | 1.43B | 1.18B | 1.15B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 122.68M | 94.66M | 106.45M | 79.72M | 94.16M |
| Total Debt | 374.50M | 322.84M | 135.61M | 223.44M | 294.07M |
| Total Liabilities | 721.11M | 572.22M | 399.43M | 494.31M | 566.60M |
| Stockholders Equity | 991.07M | 847.13M | 773.70M | 653.85M | 563.94M |
Cash Flow | |||||
| Free Cash Flow | 154.28M | 134.26M | 133.69M | 74.43M | 149.65M |
| Operating Cash Flow | 171.33M | 155.26M | 165.54M | 102.63M | 162.42M |
| Investing Cash Flow | -205.42M | -319.14M | -30.79M | -29.52M | -154.47M |
| Financing Cash Flow | 54.01M | 159.91M | -111.11M | -80.57M | 22.81M |
Kadant Technical Analysis
Positive
316.47
Price Trends
321.09
Negative
305.89
Positive
309.61
Positive
Market Momentum
-7.26
Negative
54.62
Neutral
47.53
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAI, the sentiment is Positive. The current price of 316.47 is above the 20-day moving average (MA) of 302.29, below the 50-day MA of 321.09, and above the 200-day MA of 309.61, indicating a neutral trend. The MACD of -7.26 indicates Negative momentum. The RSI at 54.62 is Neutral, neither overbought nor oversold. The STOCH value of 47.53 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KAI.
Kadant Risk Analysis
Kadant disclosed 33 risk factors in its most recent earnings report. Kadant reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kadant Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $1.79B | 16.64 | 11.42% | ― | 3.08% | 35.81% | |
78 Outperform | $4.71B | 21.55 | 21.00% | 1.09% | 8.75% | 64.82% | |
70 Outperform | $4.44B | 29.38 | 11.30% | 1.06% | 5.06% | -22.73% | |
69 Neutral | $3.82B | 33.07 | 11.32% | 0.46% | -0.96% | -11.55% | |
66 Neutral | $4.73B | 118.57 | 11.59% | 0.26% | 14.87% | 15.63% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
56 Neutral | $2.49B | 18.62 | 12.21% | 1.42% | 9.30% | -12.55% |
* Industrials Sector Average
KAI
Kadant
323.73
12.66
4.07%
CXT
Crane NXT
43.30
-1.15
-2.60%
FELE
Franklin Electric Co
100.54
12.98
14.83%
MWA
Mueller Water Products
30.13
6.30
26.42%
THR
Thermon Group Holdings
54.37
29.96
122.74%
CSW
CSW Industrials
287.25
6.35
2.26%
Kadant Corporate Events
Business Operations and StrategyFinancial Disclosures
Kadant Updates Non-GAAP Metrics and 2026 Guidance
Neutral
Feb 23, 2026
On February 19, 2026, Kadant Inc. announced during its fourth-quarter and full-year 2025 earnings webcast that it will change its methodology for calculating adjusted operating income, adjusted net income, and adjusted diluted EPS to exclude the f...
Business Operations and StrategyFinancial Disclosures
Kadant Posts Record Q4 Revenue and Improves Margins
Positive
Feb 18, 2026
Kadant reported on February 18, 2026, that fourth-quarter 2025 revenue rose 11% year over year to a record $286.2 million, with gross margin improving to 43.9% and adjusted EBITDA up 11%, while net income and GAAP EPS were flat at $24 million and ...
Business Operations and StrategyM&A Transactions
Kadant to Host Webcast on Proposed Böhler Profil Acquisition
Neutral
Feb 2, 2026
Kadant Inc. announced that on February 3, 2026, it will host a previously scheduled webcast and conference call to discuss its proposed acquisition of voestalpine BÖHLER Profil GmbH Co KG, with an accompanying investor presentation made avai...
Business Operations and StrategyM&A Transactions
Kadant Announces Acquisition of Voestalpine Böhler Profil Unit
Positive
Jan 29, 2026
On January 29, 2026, Kadant Holdings GmbH, a subsidiary of Kadant Inc., agreed to acquire voestalpine BÖHLER Profil GmbH Co KG and its related management company from voestalpine High Performance Metals GmbH for approximately €157 mill...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.