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Kimball Electronics (KE)
NASDAQ:KE
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Kimball Electronics
(NASDAQ:KE)
Rating:70Outperform
Price Target:
$22.00
▲(12.59%Upside)
Kimball Electronics (KE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$492.00M
Dividend YieldN/A
Average Volume (3M)177.48K
Price to Earnings (P/E)28.1
Beta (1Y)1.10
Revenue Growth-13.71%
EPS Growth-44.00%
CountryUS
Employees7,000
SectorIndustrials
Sector Strength89
IndustryElectrical Equipment & Parts
Share Statistics
EPS (TTM)0.27
Shares Outstanding24,380,394
10 Day Avg. Volume115,167
30 Day Avg. Volume177,478
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)1.31
Price to Sales (P/S)0.00
P/FCF Ratio-6.67
Enterprise Value/Market Cap1.88
Enterprise Value/Revenue0.14
Enterprise Value/Gross Profit8.48
Enterprise Value/Ebitda2.85
Forecast
1Y Price Target
$19.00Price Target Upside-2.76% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Kimball Electronics Business Overview & Revenue Model
Company DescriptionKimball Electronics (KE) is a global contract electronics manufacturing services (EMS) company that specializes in the production of electronic assemblies and products. The company operates primarily in the automotive, medical, industrial, and public safety sectors, providing a wide range of services including design engineering, manufacturing, testing, and distribution. With a focus on quality and innovation, Kimball Electronics delivers tailored solutions to meet the specific needs of its clients across various industries.
How the Company Makes MoneyKimball Electronics makes money through its contract manufacturing services where it partners with original equipment manufacturers (OEMs) to produce electronic assemblies and products. The company's revenue model is centered around long-term contracts with clients in diverse sectors such as automotive, medical, and industrial, where it provides end-to-end solutions from design to distribution. Key revenue streams include manufacturing services, engineering and design services, and after-market support. Significant factors contributing to its earnings include strategic relationships with major OEMs, a strong reputation for quality and reliability, and a global manufacturing footprint that allows it to efficiently serve international markets.
Kimball Electronics Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q3-2025)
| % Change Since: 32.83%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strategic initiatives such as debt reduction, investment in a new facility, and positive cash flow. However, these were offset by sales declines, particularly in the Automotive and Industrial segments, and operational challenges affecting margins. Despite reiterating guidance at the high end, the mixed results and uncertain environment contribute to a balanced outlook.Q3-2025 Updates
Positive Updates
Significant Debt Reduction
Borrowings have decreased by 45% from peak levels, amounting to a $116 million reduction, or 40% from the beginning of the fiscal year.
New Manufacturing Facility in Indianapolis
Announced the addition of a new manufacturing facility in Indianapolis focused on the medical industry, representing a strategic shift towards expanding medical CMO capabilities.
Cash Flow and Liquidity Improvement
Reported fifth consecutive quarter of positive cash flow, with cash flow from operating activities at $30.9 million and short-term liquidity available totaling $304.6 million.
Guidance Reiteration
Reiterated guidance for fiscal year 2025, expecting to be at the top end of the range for sales ($1.4 billion to $1.44 billion) and operating income margin.
Operational Efficiency
Adjusted selling and administrative expenses reduced by 24%, with improvements leading to a 50 basis point enhancement compared to the previous year.
Negative Updates
Year-Over-Year Sales Decline
Net sales in the third quarter were $374.6 million, indicating a 12% decrease year-over-year, primarily due to the divestiture of the AT&M business and lower sales in EMS manufacturing facilities.
Automotive and Industrial Segment Challenges
Automotive sales decreased by 14% and Industrial sales by 15% year-over-year, with significant declines in specific regions such as North America and Europe.
Gross Margin Decline
The gross margin rate in Q3 was 7.2%, a 70 basis point decline compared to the same period in fiscal 2024, influenced by consigned inventory sales with modest markup and lower absorption.
High Effective Tax Rate
The effective tax rate for the third quarter was 46.6%, driven by limitations on the tax deductibility of interest expense and withholding taxes on global cash repatriation.
Company Guidance
During the Kimball Electronics Third Quarter Fiscal 2025 Earnings Conference Call, the company reiterated its guidance for fiscal 2025, expecting to be at the top end of the range for both net sales, projected between $1.4 billion to $1.44 billion, and adjusted operating income, estimated at 3.4% to 3.6% of net sales. The company continues to focus on strategic initiatives, including the addition of a new 300,000 square feet manufacturing facility in Indianapolis dedicated to medical device production. This facility aims to support the company's growth as a Contract Manufacturing Organization (CMO) in the medical sector. Despite a 12% year-over-year decline in Q3 net sales to $375 million, the company reported a sequential 5% increase, driven in part by a $24 million non-recurring consigned inventory sale in the Medical vertical. Additionally, cash and cash equivalents were $51.4 million, with borrowings reduced to $178.8 million, reflecting a $26 million decrease from the previous quarter.Kimball Electronics Financial Statement Overview
Summary
Kimball Electronics shows mixed financial results. While cash flow management and a stable balance sheet with conservative leverage are strengths, declining revenue and low profitability margins are significant concerns. The overall financial foundation remains stable despite these challenges.Income Statement
Kimball Electronics has shown mixed performance in its income statement. The TTM gross profit margin stands at 7.11%, and the net profit margin is 1.17%, indicating thin profitability. Revenue declined from the previous year by 10.39%, signaling a challenge in maintaining growth. EBIT and EBITDA margins of 3.16% and 5.53% respectively highlight modest operating performance. While profitability is low, the company maintains consistent EBIT and EBITDA margins.65
Positive
Balance Sheet
The balance sheet indicates a stable financial position with a debt-to-equity ratio of 0.33, reflecting conservative leverage. The equity ratio is 51.00%, suggesting a solid capital structure. ROE is relatively low at 3.27%, indicating limited return to shareholders compared to equity. Overall, the company maintains a healthy balance sheet despite low profitability.72
Positive
Cash Flow
Cash flow analysis reveals a strong operating cash flow to net income ratio of 8.60, demonstrating excellent cash generation relative to net income. Free cash flow grew significantly, indicating improved cash management. The free cash flow to net income ratio is robust at 6.76, reflecting efficient cash use. Overall, cash flow management is a notable strength for Kimball Electronics.78
Positive
| Breakdown | TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.54B | 1.71B | 1.82B | 1.35B | 1.29B | 1.20B |
| Gross Profit | 109.22M | 140.26M | 156.14M | 104.60M | 118.03M | 83.84M |
| EBITDA | 84.99M | 90.34M | 124.91M | 82.43M | 100.98M | 72.69M |
| Net Income | 17.95M | 20.51M | 55.83M | 31.25M | 56.79M | 18.20M |
Balance Sheet | ||||||
| Total Assets | 1.07B | 1.21B | 1.26B | 1.04B | 814.06M | 774.83M |
| Cash, Cash Equivalents and Short-Term Investments | 51.38M | 77.97M | 42.95M | 49.85M | 106.44M | 64.99M |
| Total Debt | 178.28M | 294.84M | 281.45M | 180.58M | 66.21M | 118.14M |
| Total Liabilities | 526.44M | 667.46M | 735.73M | 581.80M | 372.09M | 395.46M |
| Stockholders Equity | 548.12M | 540.46M | 523.99M | 453.97M | 441.97M | 379.37M |
Cash Flow | ||||||
| Free Cash Flow | 121.42M | 26.18M | -103.17M | -157.89M | 90.74M | 34.06M |
| Operating Cash Flow | 154.37M | 73.22M | -13.80M | -83.18M | 130.09M | 72.81M |
| Investing Cash Flow | -13.98M | -46.52M | -90.47M | -74.80M | -38.80M | -38.48M |
| Financing Cash Flow | -154.21M | 8.97M | 99.18M | 103.74M | -53.08M | -17.93M |
Kimball Electronics Technical Analysis
Positive
19.54
Price Trends
18.38
Positive
17.13
Positive
17.84
Positive
Market Momentum
0.48
Positive
55.29
Neutral
60.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KE, the sentiment is Positive. The current price of 19.54 is above the 20-day moving average (MA) of 19.44, above the 50-day MA of 18.38, and above the 200-day MA of 17.84, indicating a bullish trend. The MACD of 0.48 indicates Positive momentum. The RSI at 55.29 is Neutral, neither overbought nor oversold. The STOCH value of 60.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KE.
Kimball Electronics Risk Analysis
Kimball Electronics disclosed 26 risk factors in its most recent earnings report. Kimball Electronics 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
Kimball Electronics Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $130.07M | 17.14 | 16.59% | 2.18% | 18.62% | 34.63% | |
78 Outperform | $832.09M | 21.26 | 9.19% | 0.47% | -4.36% | -24.20% | |
76 Outperform | $145.54M | 27.96 | 3.99% | ― | 2.74% | -50.31% | |
70 Outperform | $492.00M | 28.06 | 3.30% | ― | -13.71% | -44.00% | |
62 Neutral | C$6.62B | 7.59 | 3.42% | 2.82% | 6.67% | -16.67% | |
54 Neutral | $718.45M | ― | -68.88% | ― | 209.20% | 4.24% | |
44 Neutral | $110.12M | ― | -395.45% | ― | 12.42% | 23.63% |
* Industrials Sector Average
Performance Comparison
KE
Kimball Electronics
20.03
-2.51
-11.14%
ESP
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47.39
25.23
113.85%
PLPC
Preformed Line Products Company
167.32
48.69
41.04%
ULBI
Ultralife
8.62
-2.49
-22.41%
SKYX
SQL Technologies
1.01
0.15
17.44%
AMPX
Amprius Technologies Inc
6.44
5.06
366.67%
Kimball Electronics Corporate Events
Executive/Board Changes
Kimball Electronics Promotes Douglas Hass to Key Role
Neutral
Mar 26, 2025
On March 24, 2025, Kimball Electronics, Inc. announced the promotion of Douglas A. Hass to Chief Legal and Administrative Officer and Secretary. Mr. Hass, who has been with the company since 2020, will continue to participate in existing executive compensation plans, with no new arrangements made in connection with his promotion.
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.