Kadant (KAI) AI Stock Analysis

• Market Cap: $3.56B
• Dividend Yield: 0.46%
• Average Volume (3M): 145.77K
• Price to Earnings (P/E): 33.1
• Beta (1Y): 1.36
• Revenue Growth: -0.96%
• EPS Growth: -11.55%
• Country: US
• Employees: 3,500
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Machinery
• EPS (TTM): 2.27
• Shares Outstanding: 11,789,023
• 10 Day Avg. Volume: 195,513
• 30 Day Avg. Volume: 145,769
• PEG Ratio: -3.70
• Price to Book (P/B): 3.40
• Price to Sales (P/S): 3.20
• P/FCF Ratio: 21.85
• Enterprise Value/Market Cap: 1.07
• Enterprise Value/Revenue: 3.62
• Enterprise Value/Gross Profit: 8.01
• Enterprise Value/Ebitda: 16.99
• 1Y Price Target: $341.50
• Price Target Upside: 13.20% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 11.62
• Revenue Forecast (FY): $1.17B

• Rating: 71 Outperform
• Price Target: $336.00 ▲(11.38% Upside)
• Action: Upgraded Date: 03/04/26
• Date: Action: Upgraded 03/04/26

The score is driven primarily by strong underlying financial quality and cash generation, supported by a constructive technical uptrend. These positives are balanced by a high valuation and a mixed near-term demand/backlog backdrop discussed on the earnings call, with corporate actions modestly supportive but adding execution risk.

Positive Factors

Strong cash generation

Consistent, sizable operating and free cash flow provides durable financial flexibility. Strong cash conversion (FCF tracking net income ~0.8–0.9x) supports reinvestment, bolt-on M&A, dividend/shareholder actions, and the ability to weather cyclical capital spending slowdowns without immediate balance sheet strain.

Recurring aftermarket revenue

Growing aftermarket parts sales create a higher-frequency, more predictable revenue stream linked to installed base utilization. This recurring component cushions cyclicality in capital equipment, improves revenue visibility, and tends to carry higher margins and stickiness that support long-term earnings stability.

Durable margin profile

Sustained industry-leading gross and EBIT margins indicate structural pricing power and operational efficiencies. Durable margins enhance cash generation, fund R&D and services, and provide a buffer against commodity or input cost swings, making earnings less sensitive to near-term revenue fluctuations.

Negative Factors

Sluggish capital equipment demand

Flat bookings and weak capital project orders indicate a prolonged slowdown in the cyclical equipment side of the business. Given equipment sales' outsized contribution to topline volatility, sustained softness limits revenue recovery, compresses utilization of manufacturing capacity, and reduces upside to margins over the medium term.

Rising SG&A pressure

Increasing SG&A intensity erodes operating leverage and can persistently compress margins if revenue growth lags. Higher fixed costs—whether from investments, integration, or overhead—reduce flexibility to boost profitability during slow demand periods and make margin recovery more dependent on sustained top-line improvement.

Leverage and acquisition execution risk

A sizable €157M acquisition increases integration, execution and financing demands. With debt/equity above prior very-low levels, incremental leverage constrains strategic optionality and raises refinancing and covenant risk if cash flow weakens. Integration setbacks could also dilute near-term cash generation and margins.

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 and equipment, such as rotary joints, syphons, turbulator bars, expansion joints, and engineered steam and condensate systems; and doctoring, cleaning, and filtration systems and related consumables, consisting of doctor systems and holders, doctor blades, shower and fabric-conditioning systems, formation systems, and water-filtration systems. The Industrial Processing segment develops, manufactures, and markets ring and rotary debarkers, stranders, chippers, logging machinery, industrial automation and control systems, recycling and approach flow systems, and virgin pulping process equipment for use in the packaging, tissue, wood products, and alternative fuel industries. The Material Handling segment offers conveying and vibratory equipment, and balers and related equipment; and manufactures and sells biodegradable absorbent granules for carriers in as carriers in agricultural, home lawn and garden, professional lawn, turf, and ornamental applications, as well as for oil and grease absorption. The company was formerly known as Thermo Fibertek Inc. and changed its name to Kadant Inc. in July 2001. Kadant Inc. was incorporated in 1991 and is headquartered in Westford, Massachusetts.

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 machinery and process systems used in customers’ production lines (e.g., equipment for papermaking processes and fiber/wood processing applications). These revenues are typically project- and cycle-driven and can vary with customer capital spending in Kadant’s end markets. (2) Aftermarket parts and consumables: A significant portion of revenue comes from ongoing replacement parts and consumable components required to keep customer equipment operating (including components that wear over time). This stream is generally more recurring than new equipment sales because it is linked to utilization of customers’ production assets and maintenance schedules. (3) Services and support: Kadant earns revenue from installation, maintenance, repairs, and other technical services associated with its equipment, often complementing parts sales and helping sustain long-term customer relationships. (4) Acquisitions and portfolio expansion: Kadant has historically used acquisitions to broaden its product portfolio and expand its installed base, which can increase both equipment revenue opportunities and the higher-frequency aftermarket parts and service revenue that follow. (5) Partnerships: null

Kadant Financial Statement Overview

Summary

Strong profitability profile (gross margin low-to-mid 40s; EBIT margin mid-to-high teens historically) and consistently positive free cash flow with good earnings-to-cash conversion. Offsets include a recent slowdown in revenue growth/margin pressure and leverage rising versus the unusually low 2023 level (debt-to-equity ~0.43).

Income Statement

Kadant shows solid and durable profitability for an industrial machinery company, with gross margin consistently in the low-to-mid 40% range and EBIT margin generally in the mid-to-high teens. Revenue growth has been positive in most years (notably strong in 2021–2022), but the most recent year shows low growth and some profit pressure, with net margin and EBIT/EBITDA margins down versus 2023–2024 levels. Overall, the income statement supports a high-quality earnings profile, tempered by a recent moderation in growth and margins.

Balance Sheet

The balance sheet is generally healthy with equity growth over time and a moderate leverage profile. Debt to equity has increased from the very low 2023 level and is now in a more mid-range band (roughly ~0.43 in the latest year), indicating higher reliance on debt than a couple of years ago. Returns on equity remain solid (low-to-mid teens historically), though they have softened versus peak levels. Strength is adequate capitalization; key watch item is the upward drift in leverage compared with recent history.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are consistently positive, with the latest year showing higher free cash flow and healthy growth. Free cash flow tracks net income well (roughly ~0.8–0.9x in recent years), suggesting earnings are largely converting to cash. While cash flow coverage metrics have been volatile year-to-year, the latest period shows a strong rebound, supporting balance sheet flexibility and reinvestment capacity.

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

• Technical Analysis Sentiment: Negative
• Last Price: 301.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAI, the sentiment is Negative. The current price of 301.68 is below the 20-day moving average (MA) of 330.70, below the 50-day MA of 326.08, and below the 200-day MA of 311.03, indicating a bearish trend. The MACD of -4.73 indicates Positive momentum. The RSI at 33.72 is Neutral, neither overbought nor oversold. The STOCH value of 5.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KAI.

Kadant Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
THR	82 Outperform	$1.63B	16.64	11.42%	―	3.08%	35.81%
MWA	78 Outperform	$4.33B	21.55	21.00%	1.09%	8.75%	64.82%
KAI	71 Outperform	$3.56B	33.07	11.32%	0.46%	-0.96%	-11.55%
FELE	70 Outperform	$4.06B	29.38	11.30%	1.06%	5.06%	-22.73%
CSW	66 Neutral	$4.29B	118.57	12.02%	0.26%	14.87%	15.63%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CXT	56 Neutral	$2.42B	18.62	12.21%	1.42%	9.30%	-12.55%

Kadant Corporate Events

Kadant Updates Non-GAAP Metrics and 2026 Guidance

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 full amortization expense related to acquired intangible assets, rather than only amortization of acquired backlog as in the past. The company stated that this shift, accompanied by updated 2026 guidance showing materially higher adjusted EPS under the new approach and reconciliations for 2021–2025, is intended to improve consistency and comparability of its non-GAAP metrics given its irregular acquisition activity, which may affect how investors assess its underlying performance versus historical results and peers.

The most recent analyst rating on (KAI) stock is a Hold with a $303.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.

Kadant Posts Record Q4 Revenue and Improves Margins

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 $2.04, respectively. For fiscal 2025, revenue was essentially unchanged at $1.05 billion but higher margins and record cash flow were offset by a 9% decline in net income to $102 million and a 10% drop in adjusted EPS, as acquisitions and foreign exchange masked a 4% organic revenue decline; nevertheless, record bookings and strong free cash flow underpin management’s more optimistic 2026 outlook, with guidance calling for renewed top-line and earnings growth.

The most recent analyst rating on (KAI) stock is a Hold with a $345.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.

Kadant to Host Webcast on Proposed Böhler Profil Acquisition

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 available on its website for further details on the transaction. The company emphasized that expectations regarding the acquisition’s benefits, timing, financing, integration, and future performance are subject to significant risks and uncertainties, citing a broad range of potential operational, economic, regulatory, and market factors that could materially affect outcomes for Kadant and its stakeholders.

The most recent analyst rating on (KAI) stock is a Hold with a $345.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.

Kadant Announces Acquisition of Voestalpine Böhler Profil Unit

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 million in cash, subject to customary adjustments. Voestalpine BÖHLER Profil, a specialist in tailor-made special profiles with complex geometries and high-performance industrial knives using near-net-shape rolling, will be integrated into Kadant’s Industrial Processing segment and renamed Kadant Profil GmbH & Co KG upon closing. The deal, which has no financing condition, is expected to close in the first quarter of 2026 pending Austrian regulatory approvals and other customary closing conditions, and may be terminated if not completed by September 30, 2026. The acquisition agreement includes standard representations, warranties, covenants, indemnities, confidentiality, non-compete, and non-solicitation provisions, underlining a structured transaction framework that, if completed, would expand Kadant’s portfolio in high-value, niche industrial profiles and knives, potentially strengthening its position in specialized industrial processing markets.

The most recent analyst rating on (KAI) stock is a Buy with a $356.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.