Knowles (KN) AI Stock Analysis

• Market Cap: $2.01B
• Dividend Yield: N/A
• Average Volume (3M): 717.05K
• Price to Earnings (P/E): 53.0
• Beta (1Y): 1.80
• Revenue Growth: -24.42%
• EPS Growth: N/A
• Country: US
• Employees: 5,500
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.33
• Shares Outstanding: 85,151,886
• 10 Day Avg. Volume: 806,128
• 30 Day Avg. Volume: 717,051
• PEG Ratio: 0.02
• Price to Book (P/B): 2.34
• Price to Sales (P/S): 3.20
• P/FCF Ratio: 15.21
• Enterprise Value/Market Cap: 1.06
• Enterprise Value/Revenue: 3.73
• Enterprise Value/Gross Profit: 9.15
• Enterprise Value/Ebitda: 22.38
• 1Y Price Target: $27.00
• Price Target Upside: 14.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $26.00 ▲(10.08% Upside)

Knowles Corporation shows a positive financial trajectory with improving profitability and a strong balance sheet. Technical indicators support a bullish outlook. However, the high P/E ratio suggests potential overvaluation, and cash flow challenges need addressing. The earnings call highlighted strong growth prospects, particularly in the Precision Devices segment, despite some cost challenges.

Positive Factors

Strong Revenue Growth in Precision Devices

The Precision Devices segment's strong growth indicates robust demand across medtech, defense, and industrial markets, supporting long-term revenue expansion.

Effective Cash Flow Management

Strong cash flow management supports strategic investments, share buybacks, and debt reduction, enhancing financial stability and shareholder value.

Guidance for Continued Growth

Positive revenue guidance for Q4 2025 indicates continued business momentum and confidence in market demand, underpinning future growth prospects.

Negative Factors

Higher Production Costs in Specialty Film

Increased production costs in the specialty film line could pressure margins, requiring efficiency improvements to maintain profitability.

Increased SG&A Expenses

Rising SG&A expenses may impact net margins, necessitating cost control measures to sustain profitability and operational efficiency.

Tariff Exposure

While currently manageable, tariff exposure poses a risk to cost structures and pricing strategies, potentially affecting competitive positioning.

Knowles Business Overview & Revenue Model

Company Description

Knowles Corporation (KN) is a leading provider of advanced micro-acoustic microphones, balanced armature speakers, and other audio solutions. The company operates primarily in the consumer electronics, mobile communications, and industrial markets, offering innovative products that enhance audio performance in various devices. Knowles is recognized for its cutting-edge technology in sound capture and reproduction, catering to manufacturers of smartphones, wearables, and other electronic devices.

How the Company Makes Money

Knowles generates revenue through the sale of its audio components, particularly its MEMS microphones and speakers, which are integral to smartphones, tablets, and other consumer electronics. The company maintains key partnerships with major technology companies, allowing it to secure long-term contracts and a stable customer base. Additionally, Knowles benefits from a diversified product portfolio that includes both high-end and cost-effective audio solutions, enabling it to capture a wide market segment. The company's revenue model is primarily based on direct sales to OEMs (original equipment manufacturers) and ODMs (original design manufacturers), along with licensing agreements for its proprietary technologies.

Knowles Financial Statement Overview

Summary

Knowles has demonstrated a recovery in profitability and maintains a strong balance sheet with low leverage. While revenue growth and profit margins are improving, cash flow metrics indicate potential challenges in sustaining growth. Overall, the company is on a positive trajectory but needs to focus on enhancing operational efficiency and cash flow generation.

Income Statement

Knowles has shown a modest revenue growth rate of 1.85% TTM, with a strong gross profit margin of 42.01%. The net profit margin improved significantly to 7.55% TTM from a negative margin in the previous year, indicating a turnaround in profitability. However, the EBIT margin of 5.31% and EBITDA margin of 51.60% TTM suggest room for improvement in operational efficiency.

Balance Sheet

The company's debt-to-equity ratio of 0.26 TTM indicates a conservative leverage position, which is positive for financial stability. The return on equity (ROE) of 5.75% TTM shows a recovery from previous losses, although it remains below industry averages. The equity ratio of 69.09% TTM reflects a strong capital structure with a high proportion of equity financing.

Cash Flow

Operating cash flow to net income ratio of 0.58 TTM suggests moderate cash generation relative to earnings. The free cash flow to net income ratio of 0.80 TTM is healthy, but the free cash flow growth rate has declined by 25.30% TTM, indicating potential challenges in sustaining cash flow growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	573.50M	553.50M	456.80M	764.70M	868.10M	764.30M
Gross Profit	233.80M	221.20M	200.10M	300.80M	341.50M	259.30M
EBITDA	95.60M	92.40M	70.90M	-360.00M	181.50M	89.00M
Net Income	39.30M	-239.50M	72.40M	-430.10M	150.40M	6.60M
Balance Sheet
Total Assets	1.09B	1.12B	1.46B	1.18B	1.73B	1.65B
Cash, Cash Equivalents and Short-Term Investments	92.50M	130.10M	87.30M	48.20M	68.90M	147.80M
Total Debt	197.00M	213.00M	286.70M	64.50M	102.40M	202.10M
Total Liabilities	336.40M	362.20M	428.70M	191.00M	275.10M	351.40M
Stockholders Equity	751.80M	756.00M	1.03B	992.90M	1.46B	1.30B
Cash Flow
Free Cash Flow	81.80M	116.50M	105.50M	54.20M	133.50M	96.20M
Operating Cash Flow	101.90M	130.10M	122.70M	86.30M	182.10M	128.10M
Investing Cash Flow	32.00M	45.20M	-141.60M	-32.70M	-129.60M	-35.10M
Financing Cash Flow	-133.40M	-132.00M	58.20M	-73.20M	-131.40M	-23.90M

Knowles Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 23.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KN, the sentiment is Positive. The current price of 23.62 is above the 20-day moving average (MA) of 23.52, above the 50-day MA of 22.71, and above the 200-day MA of 18.72, indicating a bullish trend. The MACD of 0.26 indicates Positive momentum. The RSI at 54.43 is Neutral, neither overbought nor oversold. The STOCH value of 45.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KN.

Knowles Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HLIT	―	$1.21B	18.21	16.36%	―	24.14%	16.17%
DGII	―	$1.41B	33.32	7.21%	―	-2.37%	147.46%
KN	―	$2.01B	52.96	4.68%	―	-24.42%	―
VIAV	―	$3.81B	260.27	2.13%	―	15.60%	―
NTGR	―	$983.10M	-37.27	-4.94%	―	2.94%	-228.28%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
ADTN	―	$843.75M	-7.98	-53.68%	―	3.52%	81.33%

Knowles Corporate Events

Knowles Corporation’s Earnings Call Highlights Strong Growth

The recent earnings call for Knowles Corporation reflected a generally positive sentiment, with notable achievements in revenue and EPS growth, particularly within the Precision Devices segment and defense market. The company is effectively managing its cash flow and making strategic investments, leading to share buybacks and debt reduction. Despite facing challenges such as higher production costs in the specialty film line, increased SG&A expenses, and tariff exposure, the overall outlook remains optimistic for future growth.

Knowles Corporation Reports Strong Q3 2025 Results

Knowles Corporation, headquartered in Itasca, Illinois, is a leading manufacturer of specialty electronic components, including high-performance capacitors, RF filters, advanced medtech microphones, and balanced armature speakers, serving medtech, defense, and industrial markets globally.

Knowles Corporation Reports Strong Q2 Earnings and Positive Outlook

The latest earnings call from Knowles Corporation paints a picture of robust performance and a positive outlook for the future. The company reported strong revenue and EPS growth, which exceeded expectations, and expressed optimism about market trends. While challenges such as gross margin pressure and existing debt levels were acknowledged, the overall sentiment was decidedly upbeat, with the highlights significantly outweighing the lowlights.