Kadant Inc (KAI)
NYSE:KAI
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Kadant
(NYSE:KAI)
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Rating:69Neutral
Price Target:
$316.00
â–Ľ(-4.77% Downside)
Action:Downgraded
Date:05/27/26
The score is driven by solid underlying profitability/cash generation and a constructive earnings update (raised revenue guidance, strong bookings and recurring aftermarket mix). These positives are tempered by a high valuation (P/E ~33), mixed technical momentum, and near-term balance sheet/cash flow risks tied to acquisition financing (expected leverage increase) and working-capital drag.
Positive Factors
High Aftermarket Recurrence
A 74% aftermarket mix creates a durable, recurring revenue base tied to customers' operating needs. This installed-base driven demand supports steady cash generation, higher margin mix relative to capital sales, and predictable revenue even when large project ordering slows.
Negative Factors
Rising Leverage from Acquisition
Leverage approaching 2x materially reduces financial flexibility versus prior years. Higher net debt elevates interest-cost sensitivity and limits ability to pursue opportunistic investments or withstand a downturn, increasing execution risk during integration.
Read all positive and negative factors
Positive Factors
Negative Factors
High Aftermarket Recurrence
A 74% aftermarket mix creates a durable, recurring revenue base tied to customers' operating needs. This installed-base driven demand supports steady cash generation, higher margin mix relative to capital sales, and predictable revenue even when large project ordering slows.
Read all positive factors
Kadant (KAI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.41B
Dividend Yield0.46%
Average Volume (3M)145.77K
Price to Earnings (P/E)32.2
Beta (1Y)1.44
Revenue Growth4.88%
EPS Growth-7.08%
CountryUS
Employees3,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)8.77
Shares Outstanding11,808,462
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 Cap1.18
Enterprise Value/Revenue3.67
Enterprise Value/Gross Profit8.15
Enterprise Value/Ebitda18.46
Forecast
1Y Price Target
$380.00Price Target Upside14.51% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)12.45
Revenue Forecast (FY)$1.19B
Kadant Business Overview & Revenue Model
Company Description
Kadant Inc. is a global enterprise that delivers specialized technologies and custom-engineered systems across various industries. The company operates through three primary business segments. Its Flow Control segment is dedicated to the developme...
How the Company Makes Money
Kadant makes money primarily by selling engineered capital equipment and by generating recurring aftermarket revenue tied to its installed base. A significant portion of revenue comes from (1) capital equipment and systems: large, higher-ticket sa...
Kadant Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and commercial picture: record bookings, strong recurring aftermarket revenue (74% of sales), double-digit organic growth in bookings, solid adjusted EBITDA and an EPS beat. Management raised full-year revenue guidance while incorporating the recent acquisition, highlighting confidence in long-term growth and integration progress. Offsetting these positives are margin pressure from acquisition-related amortization and product mix, higher SG&A from acquisitions and FX, temporary working capital and cash conversion headwinds, short-term EPS dilution and an expected near-term increase in leverage due to acquisition financing, and geopolitical uncertainty that is delaying some capital projects. Overall, the momentum in bookings, parts revenue and profit growth outweighs near-term acquisition-related and macro headwinds.Positive Updates
Record Bookings and Strong Order Growth
Total bookings increased 25% year-over-year in Q1, driven by double-digit organic growth and recent acquisitions; book-to-bill rose to 1.14 (a 3-year high) and ending backlog increased 13% sequentially to $326 million.
Negative Updates
Gross Margin Compression
Consolidated gross margin declined 110 basis points year-over-year to 45.0% (from 46.1%); approximately 50 basis points of the decline was attributable to acquired profit and inventory amortization, with the remainder due to unfavorable product mix.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Bookings and Strong Order Growth
Total bookings increased 25% year-over-year in Q1, driven by double-digit organic growth and recent acquisitions; book-to-bill rose to 1.14 (a 3-year high) and ending backlog increased 13% sequentially to $326 million.
Read all positive updates
Company Guidance
Kadant raised 2026 revenue guidance to $1.178–$1.203 billion (up from $1.116–$1.185B) and set adjusted EPS guidance of $12.33–$12.68 (this excludes $34.5M of intangible amortization—$2.20 per share—and $0.33 of acquisition-related costs), while noting Q1 is expected to be the weakest quarter; Q2 revenue is guided to $296–$306M with adjusted EPS $2.88–$2.98 (excludes $0.55 amortization and $0.07 acquisition costs). Key modeling assumptions include gross margin of 44.5%–45.0%, SG&A 27.6%–28.1% of revenue, net interest expense $20–$21M, a tax rate of 27.5%–28.0%, and depreciation of $27–$27.5M. The company said the April acquisition of Kadant Profil will be dilutive by ~$0.20 to 2026 adjusted EPS (intercompany revenue treated conservatively until on‑hand inventory is sold), noted they borrowed EUR155M to fund the deal (net debt was $244M and leverage was 1.27 at quarter end but is expected to rise to just under 2 next quarter), and reiterated liquidity of roughly $210M revolver capacity plus ~$200M uncommitted capacity; operational metrics cited include a 1.14 book‑to‑bill, $326M ending backlog, 74% parts & consumables mix, 147 cash conversion days, and working capital ~20% of revenue (17.4% excluding 2025 acquisitions).Kadant Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.09B | 1.05B | 1.05B | 957.67M | 904.74M | 786.58M |
| Gross Profit | 492.10M | 475.73M | 466.15M | 416.31M | 389.56M | 337.37M |
| EBITDA | 217.37M | 210.38M | 222.69M | 200.71M | 207.05M | 151.18M |
| Net Income | 103.42M | 101.97M | 111.60M | 116.07M | 120.93M | 84.04M |
Balance Sheet | ||||||
| Total Assets | 1.59B | 1.71B | 1.43B | 1.18B | 1.15B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 119.82M | 122.68M | 94.66M | 106.45M | 79.72M | 94.16M |
| Total Debt | 363.36M | 374.50M | 322.84M | 135.61M | 223.44M | 294.07M |
| Total Liabilities | 708.50M | 721.11M | 572.22M | 399.43M | 494.31M | 566.60M |
| Stockholders Equity | 884.07M | 991.07M | 847.13M | 773.70M | 653.85M | 563.94M |
Cash Flow | ||||||
| Free Cash Flow | 153.94M | 154.28M | 134.26M | 133.69M | 74.43M | 149.65M |
| Operating Cash Flow | 170.41M | 171.33M | 155.26M | 165.54M | 102.63M | 162.42M |
| Investing Cash Flow | -205.51M | -205.42M | -319.14M | -30.79M | -29.52M | -154.47M |
| Financing Cash Flow | 57.05M | 54.01M | 159.91M | -111.11M | -80.57M | 22.81M |
Kadant Technical Analysis
Negative
331.84
Price Trends
313.02
Negative
318.02
Negative
305.84
Negative
Market Momentum
-8.18
Positive
37.01
Neutral
10.19
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 331.84 is above the 20-day moving average (MA) of 307.96, above the 50-day MA of 313.02, and above the 200-day MA of 305.84, indicating a bearish trend. The MACD of -8.18 indicates Positive momentum. The RSI at 37.01 is Neutral, neither overbought nor oversold. The STOCH value of 10.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $4.01B | 19.47 | 20.74% | 1.09% | 6.57% | 43.96% | |
70 Outperform | $4.51B | 30.42 | 11.47% | 1.06% | 7.98% | -13.65% | |
69 Neutral | $3.41B | 32.21 | 11.03% | 0.46% | 4.88% | -7.08% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $4.48B | 40.44 | 10.28% | 0.26% | 23.25% | -20.66% | |
56 Neutral | $2.36B | 18.81 | 10.63% | 1.42% | 14.01% | -23.03% |
* Industrials Sector Average
KAI
Kadant
282.45
-31.62
-10.07%
CXT
Crane NXT
42.47
-11.24
-20.93%
FELE
Franklin Electric Co
103.57
19.89
23.76%
MWA
Mueller Water Products
25.82
2.90
12.67%
CSW
CSW Industrials
272.07
-15.50
-5.39%
Kadant Corporate Events
Executive/Board ChangesShareholder Meetings
Kadant Shareholders Back Board Nominees and Governance Proposals
Positive
May 26, 2026
On May 20, 2026, Kadant Inc. stockholders held their 2026 annual meeting and elected Dr. John M. Albertine and Thomas C. Leonard to the board for three-year terms expiring in 2029, with both nominees receiving strong majority support despite some ...
Business Operations and StrategyFinancial Disclosures
Kadant Raises 2026 Revenue Guidance After Strong Quarter
Positive
May 5, 2026
Kadant reported strong first-quarter 2026 results on May 5, 2026, with revenue up 18% to $281.5 million and record bookings up 25% to $320.8 million, driven by robust aftermarket demand and recent acquisitions, despite a slight decline in gross ma...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Kadant Completes Acquisition of Voestalpine Böhler Profil Units
Positive
Apr 30, 2026
On April 30, 2026, Kadant Holdings GmbH, a subsidiary of Kadant Inc., completed its previously announced acquisition of voestalpine BÖHLER Profil GmbH Co KG and voestalpine BÖHLER Profil VerwaltungsGmbH 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.