Kadant (KAI) AI Stock Analysis

• Market Cap: $4.00B
• Dividend Yield: 0.39%
• Average Volume (3M): 109.36K
• Price to Earnings (P/E): 37.8
• Beta (1Y): 1.33
• Revenue Growth: 1.74%
• EPS Growth: -7.64%
• Country: US
• Employees: 3,500
• Sector: Industrials
• Sector Strength: 75
• Industry: Industrial - Machinery
• EPS (TTM): 2.31
• Shares Outstanding: 11,777,467
• 10 Day Avg. Volume: 90,526
• 30 Day Avg. Volume: 109,358
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 3.70
• Enterprise Value/Gross Profit: 8.29
• Enterprise Value/Ebitda: 18.46
• 1Y Price Target: $349.33
• Price Target Upside: 2.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 74 Outperform
• Price Target: $368.00 ▲(8.36% Upside)

Kadant's overall stock score reflects strong financial performance and cash flow generation, which are the most significant factors. Technical analysis and earnings call insights present a mixed outlook, with some positive momentum and strategic initiatives offset by valuation concerns and external challenges. The stock's high P/E ratio and low dividend yield suggest it may be overvalued, impacting its attractiveness to value-focused investors.

Positive Factors

Earnings

Kadant’s Q2 results exceeded expectations, with strong performance in revenue, adjusted EBITDA, and adjusted EPS.

Financial Performance

Kadant experienced a 16% increase in ending backlog, driven by improving capital equipment orders.

Market Expansion

The recent acquisition of Italian-based Babbini could enhance Kadant's market position and expand its capabilities.

Negative Factors

Geopolitical Challenges

Tariff uncertainty, a deceleration in China, and sluggish U.S. residential activity continue to act as an overhang.

Guidance

Weaker than expected third-quarter guidance essentially offset the EPS beat in the second quarter versus the midpoint of guidance.

Tariffs

Tariff headwinds remain relatively unchanged, posing a potential challenge to Kadant's profitability.

Kadant Business Overview & Revenue Model

Company Description

Kadant (KAI) is a global provider of engineered systems and products that are used in various industrial processes. The company primarily operates in the paper and packaging, wood processing, and other industrial sectors. Kadant’s core products include equipment for the production and processing of paper, as well as systems for recycling and waste management, enhancing operational efficiency and sustainability. The company also offers aftermarket parts and services to its customers, ensuring continuous support and optimization of their equipment.

How the Company Makes Money

Kadant generates revenue through multiple key streams, including the sale of engineered systems and products, aftermarket parts, and services. The company earns a significant portion of its revenue from the sale of equipment used in paper and packaging production, which includes advanced technologies for drying, filtration, and fluid handling. Aftermarket services, including parts replacement, maintenance, and technical support, contribute to recurring revenue, as customers require ongoing support for their systems. Additionally, Kadant has established partnerships with various industrial players, enhancing its market reach and enabling the company to leverage collaborative opportunities for innovation and efficiency improvements, further driving its earnings potential.

Kadant Financial Statement Overview

Summary

Kadant exhibits strong financial health with stable profitability, efficient operations, and prudent financial management. Robust revenue growth and profitability are evident, though some attention is needed on debt management as liabilities increase.

Income Statement

Kadant's income statement is robust with a consistent gross profit margin of around 44% over the periods. The net profit margin is stable at approximately 10%, reflecting efficiency in operations. Revenue growth from 2022 to 2023 shows a significant increase of 5.85%, indicating strong market demand. EBIT and EBITDA margins are healthy, demonstrating strong operational performance and management efficiency.

Balance Sheet

Kadant's balance sheet reflects a moderate debt-to-equity ratio, showing prudent financial leverage. The return on equity remains strong, indicating effective use of equity capital. The equity ratio is stable, suggesting a solid financial position and asset management. Despite an increase in total debt, the company's equity growth supports stability.

Cash Flow

The cash flow statement is strong, with a consistent operating cash flow to net income ratio, indicating effective cash management. Free cash flow growth is evident, reflecting the company's ability to generate cash after capital expenditures. The company maintains a good balance between investing and financing activities to support growth and shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	1.05B	957.67M	904.74M	786.58M	635.03M
Gross Profit	465.52M	466.15M	416.31M	389.56M	337.37M	277.31M
EBITDA	209.18M	171.25M	200.71M	187.77M	150.72M	112.11M
Net Income	110.97M	111.60M	116.07M	120.93M	84.04M	55.20M
Balance Sheet
Total Assets	1.44B	1.43B	1.18B	1.15B	1.13B	927.57M
Cash, Cash Equivalents and Short-Term Investments	91.68M	94.66M	103.83M	76.37M	91.19M	65.68M
Total Debt	276.88M	288.53M	135.61M	204.98M	269.51M	233.47M
Total Liabilities	548.87M	572.22M	399.43M	494.31M	566.60M	430.67M
Stockholders Equity	875.95M	847.13M	773.70M	653.85M	563.94M	495.36M
Cash Flow
Free Cash Flow	136.70M	134.26M	133.69M	74.43M	149.65M	85.29M
Operating Cash Flow	155.27M	155.26M	165.54M	102.63M	162.42M	92.88M
Investing Cash Flow	-85.71M	-319.14M	-30.79M	-29.52M	-154.47M	-14.54M
Financing Cash Flow	-56.08M	159.91M	-111.11M	-80.57M	22.81M	-84.56M

Kadant Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 339.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 339.61 is above the 20-day moving average (MA) of 335.97, above the 50-day MA of 327.42, and below the 200-day MA of 345.50, indicating a neutral trend. The MACD of 3.33 indicates Negative momentum. The RSI at 53.71 is Neutral, neither overbought nor oversold. The STOCH value of 70.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KAI.

Kadant Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FELE	81 Outperform	$4.26B	24.78	14.38%	1.09%	2.20%	-3.74%
MWA	75 Outperform	$4.10B	27.71	17.33%	1.02%	10.19%	20.71%
GTES	74 Outperform	$6.21B	30.98	6.31%	―	-2.67%	-17.55%
KAI	74 Outperform	$4.00B	37.82	12.21%	0.39%	1.74%	-7.64%
CSW	72 Outperform	$4.36B	31.03	15.79%	0.21%	12.27%	19.05%
NPO	71 Outperform	$4.69B	55.79	5.78%	0.55%	4.99%	169.24%
Sector *	66 Neutral	€3.24B	23.70	6.98%	2.60%	-1.64%	-20.27%

Kadant Corporate Events

Kadant Reports Mixed Q2 2025 Financial Results

Kadant Inc. reported a mixed financial performance for the second quarter of 2025, with a 7% increase in bookings to $269 million but a 7% decrease in revenue to $255 million compared to the previous year. Despite a decline in net income and earnings per share, the company saw significant improvements in operating and free cash flow, indicating strong cash management. The company remains optimistic about future bookings and maintains its revenue and adjusted EPS guidance for the full year, reflecting stable demand for its products and a healthy backlog.

The most recent analyst rating on (KAI) stock is a Buy with a $360.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.

Kadant’s Annual Stockholders Meeting Highlights Key Decisions

On May 14, 2025, Kadant Inc. held its annual meeting of stockholders where several key proposals were voted upon. The stockholders elected Jonathan W. Painter and Jeffrey L. Powell as directors for a term expiring in 2028, approved a non-binding advisory resolution on executive compensation, granted restricted stock units to non-employee directors, and ratified KPMG LLP as the independent accounting firm for 2025.

The most recent analyst rating on (KAI) stock is a Buy with a $360.00 price target. To see the full list of analyst forecasts on Kadant stock, see the KAI Stock Forecast page.