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Knowles Corp (KN)
NYSE:KN
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Knowles
(NYSE:KN)
59Neutral
Positive Factors
Financial Performance
Knowles introduced a new long-term model for higher top-line growth and continued margin expansion.
Market Opportunities
Knowles highlighted new growth areas with the launch of its new Ceramic Inductor line and MedTech Micro Solutions, which could provide upside to CAGR targets.
Shareholder Returns
Knowles may use as much as 50% of FCF for share repurchases moving forward, as the Board authorized an additional $150 million of repurchases.
Negative Factors
Operational Challenges
Knowles posted worse results and guidance as manufacturing challenges delayed shipments of specialty film capacitors.
Pricing and Costs
GMs decreased, driven by lower pricing on mature products and higher factory costs.
Revenue Impact
The revenue shortfall in 4Q is due to a slower-than-expected ramp of a specialty film capacitor facility associated with the Cornell acquisition.
Knowles (KN) vs. S&P 500 (SPY)
Market Cap
$1.49B
Dividend YieldN/A
Average Volume (3M)892.17K
Price to Earnings (P/E)―
Beta (1Y)1.67
Revenue Growth-18.14%
EPS Growth-405.65%
CountryUS
Employees5,500
SectorTechnology
Sector Strength80
IndustryCommunication Equipment
Share Statistics
EPS (TTM)0.18
Shares Outstanding86,975,040
10 Day Avg. Volume611,135
30 Day Avg. Volume892,175
Financial Highlights & Ratios
PEG Ratio3.99
Price to Book (P/B)1.91
Price to Sales (P/S)0.00
P/FCF Ratio14.31
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.33Price Target Upside12.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Knowles Business Overview & Revenue Model
Company DescriptionKnowles Corporation is a global leader in the design and manufacture of advanced micro-acoustic microphones, speakers, voice processing, and precision device solutions. Operating primarily in the consumer electronics and hearing health sectors, Knowles provides high-performance audio solutions to mobile, ear, and IoT markets, as well as offering precision products for the communications, medtech, and automotive industries.
How the Company Makes MoneyKnowles Corporation generates revenue through the sale of its micro-acoustic components, including MEMS (Micro-Electro-Mechanical Systems) microphones, speakers, and audio processing solutions, to manufacturers in the consumer electronics, hearing health, and communications industries. A significant portion of its revenue comes from supplying these components to leading smartphone manufacturers and hearing aid producers. The company also earns from its precision device solutions, which are used in a variety of applications across medtech, industrial, and automotive markets. Strategic partnerships and collaborations with tech giants and other industry leaders further bolster its revenue streams by expanding its market reach and enhancing its product offerings.
Knowles Financial Statement Overview
Summary
Knowles faces revenue growth and profitability challenges as indicated by a declining income statement. The balance sheet shows moderate stability but concerns about declining equity persist. Cash flow remains strong, with positive operating cash flow supporting potential reinvestment.Income Statement
The income statement reveals a challenging period for Knowles with declining revenue and net losses. The TTM (Trailing-Twelve-Months) data shows a negative net profit margin and EBITDA, indicating profitability concerns. However, gross profit margin remains positive, suggesting operational efficiency. The decline in revenue from the previous year highlights potential market challenges or loss of competitive edge.42
Neutral
Balance Sheet
The balance sheet shows a moderate financial position with a reasonable debt-to-equity ratio and a positive equity ratio, reflecting financial stability. However, the decline in stockholders' equity over the years is a concern. The company has managed its liabilities well, maintaining a moderate level of total debt relative to equity.55
Neutral
Cash Flow
Cash flow analysis shows a healthy operating cash flow, but a declining trend in free cash flow growth rate. The company maintains a positive free cash flow, indicating potential for reinvestment and debt servicing. The operating cash flow to net income ratio is strong, suggesting that operating activities are generating sufficient cash relative to net income.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 621.90M | 553.50M | 707.60M | 764.70M | 868.10M | 764.30M | Gross Profit |
| 249.70M | 234.80M | 283.40M | 276.30M | 359.50M | 271.20M | EBIT |
| 52.50M | 51.80M | 51.10M | 66.20M | 115.80M | 45.30M | EBITDA |
| -139.60M | 51.80M | 98.90M | -360.00M | 184.90M | 110.50M | Net Income Common Stockholders |
| -240.70M | -239.50M | 72.40M | -430.10M | 150.40M | 2.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 101.90M | 130.10M | 87.30M | 48.20M | 68.90M | 147.80M | Total Assets |
| 1.10B | 1.12B | 1.46B | 1.18B | 1.73B | 1.65B | Total Debt |
| 209.80M | 213.00M | 286.70M | 60.60M | 96.10M | 194.00M | Net Debt |
| 107.90M | 82.90M | 199.40M | 12.40M | 27.20M | 46.20M | Total Liabilities |
| 341.30M | 362.20M | 428.70M | 191.00M | 272.10M | 351.40M | Stockholders Equity |
| 755.80M | 756.00M | 1.03B | 992.90M | 1.46B | 1.30B |
| Cash Flow | Free Cash Flow | ||||
| 99.90M | 116.50M | 105.50M | 54.20M | 133.50M | 96.20M | Operating Cash Flow |
| 114.10M | 130.10M | 122.70M | 86.30M | 182.10M | 128.10M | Investing Cash Flow |
| 37.90M | 45.20M | -141.60M | -32.70M | -129.60M | -35.10M | Financing Cash Flow |
| -171.80M | -132.00M | 58.20M | -73.20M | -131.40M | -23.90M |
Knowles Technical Analysis
Positive
17.12
Price Trends
15.60
Positive
17.20
Negative
17.63
Negative
Market Momentum
0.49
Negative
64.06
Neutral
68.55
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 17.12 is above the 20-day moving average (MA) of 16.13, above the 50-day MA of 15.60, and below the 200-day MA of 17.63, indicating a neutral trend. The MACD of 0.49 indicates Negative momentum. The RSI at 64.06 is Neutral, neither overbought nor oversold. The STOCH value of 68.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KN.
Knowles Risk Analysis
Knowles disclosed 23 risk factors in its most recent earnings report. Knowles 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
Knowles Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $747.20M | 13.93 | 29.83% | 4.41% | 5.09% | 12.45% | |
79 Outperform | $1.23B | 29.42 | 7.30% | ― | -4.47% | 195.28% | |
72 Outperform | $1.08B | 21.16 | 12.45% | ― | 20.53% | -27.75% | |
61 Neutral | $874.45M | 37.37 | 4.78% | ― | -6.97% | ― | |
60 Neutral | $11.62B | 10.48 | -7.27% | 2.93% | 7.46% | -10.64% | |
59 Neutral | $1.49B | ― | -26.83% | ― | -18.14% | -405.65% | |
56 Neutral | $1.36B | ― | -8.49% | ― | 19.02% | 76.67% |
* Technology Sector Average
Performance Comparison
KN
Knowles
17.12
-0.36
-2.06%
DGII
Digi International
33.29
6.59
24.68%
HLIT
Harmonic
9.54
-2.13
-18.25%
ITRN
Ituran Location And Control
37.82
11.48
43.58%
NTGR
Netgear
30.38
17.79
141.30%
VSAT
ViaSat
10.92
-8.46
-43.65%
Knowles Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 9.39%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
The earnings call reflects a mostly positive outlook for Knowles Corporation with strong revenue performance, cash flow management, and minimal impact from tariffs. While there are challenges like a decline in gross margins and production issues, they are being actively managed, and the company demonstrates confidence in growth prospects for 2025.Q1-2025 Updates
Positive Updates
Strong Q1 Revenue Performance
Knowles Corporation delivered Q1 2025 revenue of $132 million, at the high end of the guided range, with EPS of $0.18 at the midpoint of the guided range.
Medtech and Specialty Audio Segment Growth
Q1 revenue for medtech and specialty audio was $60 million, showing a slight year-over-year increase, driven by strength in specialty audio and supply of metal cans.
Precision Devices Segment Stability
Q1 revenue for Precision Devices was $73 million, consistent with Q4, with improvements in production flow and yields in the specialty film line.
Positive Cash Flow and Debt Reduction
The company generated cash from operations exceeding guidance, repurchased $5 million in shares, and reduced debt by $15 million.
Strong Booking Trends
The Precision Devices segment reported strong booking trends for the second consecutive quarter, with a book-to-bill ratio above 1.15, excluding a $75 million energy order.
Minimal Tariff Impact
Less than 5% of revenue and 3% of cost of goods sold are impacted by tariffs, with expectations to pass costs to customers without significant business loss.
Positive Outlook for 2025
Expectations for year-over-year growth in Q2 and throughout 2025, with strong design wins and increasing order activity.
Negative Updates
Gross Margin Decline
Q1 gross margins were 48.7%, down 450 basis points from the year-ago period, affected by customer mix and absence of a one-time benefit.
Seasonal Downturn in Hearing Health Revenue
The hearing health segment experienced a seasonal downturn, although it was offset by gains in specialty audio.
Production Challenges in Specialty Film Line
Ongoing production challenges in the specialty film line are being addressed, but have impacted Precision Devices' current capacity utilization.
Company Guidance
In the Q1 2025 earnings call for Knowles Corporation, the company provided robust guidance and insights into its future expectations and market positioning. The call highlighted a strong start to the fiscal year with revenue reaching $132 million, which was at the high end of the guided range, and an EPS of $0.18, aligning with midpoint expectations. The company reported a significant book-to-bill ratio of above 1.15 in the Precision Devices segment, indicating strong demand and future growth potential. Knowles Corporation expects Q2 revenue to range between $135 million and $145 million, with EPS projected to be between $0.21 and $0.25, reflecting confidence in ongoing market strength and operational efficiencies. The company also emphasized its minimal direct tariff exposure, with less than 5% of revenue subject to tariffs, and maintained that its medtech, defense, and industrial markets remain relatively insulated from tariff impacts. As a result, Knowles anticipates continued year-over-year growth, backed by strong order activity, particularly in its medtech and specialty audio and precision devices segments.Knowles Corporate Events
M&A TransactionsShareholder MeetingsBusiness Operations and Strategy
Knowles Announces Investor Update Meeting on May 13
Positive
May 13, 2025
Knowles Corporation announced an investor update meeting scheduled for May 13, 2025, to discuss its business and financial outlook. The company is repositioning its portfolio towards higher-margin products and markets, including MedTech, Defense, and Industrial sectors, and aims for significant revenue and EBITDA growth over the next five years. The strategic shift involves divestitures and acquisitions, enhancing its market position and financial performance, which is expected to create value for stakeholders.
The most recent analyst rating on (KN) stock is a Buy with a $25.00 price target. To see the full list of analyst forecasts on Knowles stock, see the KN Stock Forecast page.
Spark’s Take on KN Stock
According to Spark, TipRanks’ AI Analyst, KN is a Neutral.
Knowles Corporation has a mixed outlook with strengths in cash flow and positive market momentum, but struggles with profitability and valuation. The earnings call indicates optimism with strong order activity and minimal tariff effects. However, production challenges and a negative P/E ratio hinder the overall score.
To see Spark’s full report on KN stock, click here.
Executive/Board ChangesBusiness Operations and Strategy
Knowles Grants Special Equity Award to CEO
Positive
Feb 25, 2025
On February 18, 2025, Knowles Corporation’s Board of Directors and Compensation Committee granted a special equity award of performance share units (PSUs) to CEO Jeffrey S. Niew, under the company’s 2018 Equity and Cash Incentive Plan. This award, designed to align with the company’s strategic goals, is contingent upon achieving specific financial targets over a three-year performance period, with potential adjustments based on revenue from acquisitions and performance metrics. The PSU award aims to incentivize leadership to meet or exceed these targets, impacting the company’s operational focus and potentially enhancing shareholder value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.