Kadant (KAI) AI Stock Analysis

• Market Cap: $3.71B
• Dividend Yield: 0.43%
• Average Volume (3M): 123.43K
• Price to Earnings (P/E): 33.5
• Beta (1Y): 1.35
• Revenue Growth: 6.83%
• EPS Growth: -1.84%
• Country: US
• Employees: 3,500
• Sector: Industrials
• Sector Strength: 87
• Industry: Industrial - Machinery
• EPS (TTM): 2.10
• Shares Outstanding: 11,775,859
• 10 Day Avg. Volume: 119,172
• 30 Day Avg. Volume: 123,434
• PEG Ratio: 0.40
• Price to Book (P/B): 3.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.81
• Enterprise Value/Market Cap: 0.59
• Enterprise Value/Revenue: 0.53
• Enterprise Value/Gross Profit: 4.72
• Enterprise Value/Ebitda: 2.63
• 1Y Price Target: $327.50
• Price Target Upside: 3.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 65 Neutral
• Price Target: $339.00 ▲(7.46%Upside)

Kadant's overall stock score reflects solid financial performance and operational resilience, despite challenges highlighted in the earnings call such as tariff impacts and revised guidance. Technical indicators suggest mixed market sentiment, while valuation concerns due to a high P/E ratio add downside risk. The company's strategic focus on growth and cost management offers a positive outlook, but investors should be cautious of valuation and external economic pressures.

Positive Factors

Aftermarket Demand

Robust demand for aftermarket parts drove strong new order activity in Q1/25.

Flow Control Performance

Flow Control segment experienced solid demand, with a notable increase in adjusted EBITDA.

Order Momentum

Order activity has regained momentum, supported by several large projects and maintenance spend.

Negative Factors

Industrial Processing Challenges

Industrial Processing revenue experienced a significant decline due to reduced capital shipments.

Macroeconomic Uncertainty

Economic headwinds and global trade policy uncertainty impacted industrial demand and capital projects.

Tariffs Impact

Management's updated 2025 guidance for revenue and adjusted EPS is lower than previous guidance, impacted by tariffs.

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 Inc. generates revenue by designing, manufacturing, and supplying a wide range of products and solutions that are essential for industrial manufacturing processes. The company earns money primarily through the sale of its engineered systems and components, which are critical for enhancing the operational efficiency of its clients' production processes. Key revenue streams include the sale of stock-preparation systems, fluid-handling systems, water-management systems, and other industrial processing technologies. Kadant also provides aftermarket services, such as maintenance and repair, which contribute to its earnings. The company benefits from strategic partnerships and a diverse customer base across various industries, which helps stabilize its revenue streams and expand its market reach.

Kadant Financial Statement Overview

Summary

Kadant exhibits strong financial health with robust revenue growth and profitability. The income statement shows healthy margins and consistent cash flow generation, while the balance sheet displays prudent financial leverage. However, attention to increasing liabilities is needed.

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	Mar 2022	Mar 2021
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
	EBIT
169.91M	171.25M	165.76M	171.28M	116.71M	81.12M
	EBITDA
209.18M	171.25M	200.71M	187.77M	150.72M	112.11M
	Net Income Common Stockholders
110.97M	111.60M	116.07M	120.93M	84.04M	55.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
91.68M	94.66M	103.83M	76.37M	91.19M	65.68M
	Total Assets
1.44B	1.43B	1.18B	1.15B	1.13B	927.57M
	Total Debt
276.88M	288.53M	135.61M	204.98M	269.51M	233.47M
	Net Debt
185.20M	193.87M	31.78M	125.26M	178.33M	166.83M
	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: Negative
• Last Price: 315.46
• 50DMA: Positive
• 100DMA: Negative
• 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 Negative. The current price of 315.46 is below the 20-day moving average (MA) of 319.09, above the 50-day MA of 312.10, and below the 200-day MA of 344.64, indicating a neutral trend. The MACD of 2.96 indicates Negative momentum. The RSI at 47.63 is Neutral, neither overbought nor oversold. The STOCH value of 52.45 is Neutral, 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
NPO	78 Outperform	$4.05B	46.81	5.90%	0.66%	2.92%	―
GTES	77 Outperform	$5.59B	26.26	6.93%	―	-4.01%	-8.86%
CSW	74 Outperform	$4.85B	34.47	16.19%	0.33%	10.41%	34.56%
MWA	73 Outperform	$3.63B	25.31	17.68%	1.16%	10.96%	43.44%
FELE	68 Neutral	$3.94B	22.12	14.11%	1.25%	-1.26%	-4.84%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
KAI	65 Neutral	$3.71B	33.48	13.38%	0.43%	6.83%	-1.84%

Kadant Corporate Events

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.

Kadant Reports Mixed Q1 2025 Financial Results

Kadant Inc. reported its financial results for the first quarter of 2025, showing a mixed performance with a 3% increase in bookings to $256 million, but a 4% decrease in revenue to $239 million compared to the previous year. Despite challenges such as geopolitical uncertainties and trade issues, the company maintained strong margin performance with a gross margin increase to 46.1% and a 15% rise in free cash flow. However, net income and GAAP EPS both decreased by 3%, while adjusted EPS saw a more significant drop of 12%. The company anticipates incremental tariff costs and economic uncertainties affecting its 2025 outlook, leading to revised revenue and earnings expectations.