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Knowles
(NYSE:KN)
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Rating:68Neutral
Price Target:
$42.00
▲(11.76% Upside)
Action:Reiterated
Date:07/24/26
KN’s score is driven primarily by solid underlying financial quality (strong margins, low leverage, positive cash generation) and a very upbeat, guidance-raising earnings call with strong bookings and margin momentum. These positives are tempered by an expensive valuation (high P/E), mixed near-term technical momentum (negative MACD), and the financial-statement risk signal of recent TTM revenue contraction and historically uneven profitability.
Positive Factors
High margins
Sustained high gross and EBITDA margins reflect durable product differentiation in precision acoustic components and favorable product mix. Such structural margin strength supports cash generation, ability to reinvest in R&D and capacity, and provides resilience through demand cycles over the next 2–6 months.
Negative Factors
TTM revenue contraction
A sharp ~24% TTM revenue decline erodes scale and limits operating leverage; even with strong margins, sustained top-line weakness can pressure unit economics, slow margin improvement, and reduce free cash flow growth unless organic demand or design wins accelerate within the next several quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
High margins
Sustained high gross and EBITDA margins reflect durable product differentiation in precision acoustic components and favorable product mix. Such structural margin strength supports cash generation, ability to reinvest in R&D and capacity, and provides resilience through demand cycles over the next 2–6 months.
Read all positive factors
Knowles Key Performance Indicators (KPIs)
Any
Revenue by Geography
Tracks where Knowles earns its revenue across countries and regions, indicating dependence on particular markets. A heavy tilt toward one geography raises exposure to regional slowdowns, trade issues, or supply-chain disruption, while a diversified footprint points to more resilient demand.
Tracks where Knowles earns its revenue across countries and regions, indicating dependence on particular markets. A heavy tilt toward one geography raises exposure to regional slowdowns, trade issues, or supply-chain disruption, while a diversified footprint points to more resilient demand.
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The Fly
The FlyKnowles (KN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.13B
Dividend YieldN/A
Average Volume (3M)1.14M
Price to Earnings (P/E)46.3
Beta (1Y)1.59
Revenue Growth12.77%
EPS Growth182.06%
CountryUS
Employees5,200
SectorTechnology
Sector Strength88
IndustryHardware, Equipment & Parts
Share Statistics
EPS (TTM)0.78
Shares Outstanding85,410,324
10 Day Avg. Volume969,675
30 Day Avg. Volume1,142,853
Financial Highlights & Ratios
PEG Ratio-0.35
Price to Book (P/B)2.37
Price to Sales (P/S)3.10
P/FCF Ratio22.45
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$42.00Price Target Upside11.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.29
Revenue Forecast (FY)$643.72M
Knowles Business Overview & Revenue Model
Company Description
Knowles Corporation is a leading provider of specialized electronic components, offering an array of micro-acoustic microphones, sophisticated balanced armature speakers, comprehensive audio solutions, high-performance capacitors, and advanced rad...
How the Company Makes Money
Knowles makes money primarily by selling its engineered acoustic components and solutions to original equipment manufacturers (OEMs) and other device makers. Revenue is generated through (1) product sales of acoustic transducers and related compon...
Knowles Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed strong operational and financial momentum driven by Precision Devices and broad-based bookings, with revenue up 14% and EPS up 38% year-over-year, margin expansion, healthy cash generation, and an upgraded full-year revenue outlook of 10%–12%. Key positives include robust PD growth (25% YoY), improved segment gross margins, repeated book-to-bill >1, and large multiyear defense and energy orders. Near-term cautions center on modest MSA growth (2%), timing variability from earlier inventory builds, higher SG&A, capacity planning risks around transient orders, and some defense revenue that is back-end loaded into 2027+. Overall, the positives materially outweigh the negatives, leaving the company with strong momentum but with a few timing and execution risks to monitor.Positive Updates
Revenue Growth Exceeds Guidance
Total revenue of $167 million in Q2 2026, up 14% year-over-year and above the high end of the company's guided range.
Negative Updates
MSA Segment Growth Moderation and Uncertainty
Medtech & Specialty Audio organic growth only 2% year-over-year; management cited inventory builds in the first half that create a Q4 headwind and noted recent industry data that could affect hearing-aid market growth assumptions (company expects 2%–4% for hearing health).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth Exceeds Guidance
Total revenue of $167 million in Q2 2026, up 14% year-over-year and above the high end of the company's guided range.
Read all positive updates
Company Guidance
Knowles guided Q3 revenue of $167–$177 million (midpoint +12.5% YoY), R&D of $9–$11 million, SG&A of $29–$31 million, adjusted EBIT margin of 22%–24%, interest of about $2 million, an effective tax rate of 15%–19% and EPS of $0.34–$0.38 (midpoint up $0.03, +9% YoY) on roughly 87 million diluted shares; they expect Q3 cash from operations of $35–$45 million and Q3 capex of $10 million (full‑year capex ~5% of revenues). For full‑year 2026 the company now expects revenue growth of 10%–12% and adjusted EBITDA growth of 20%–24% versus 2025, with EBITDA margins in excess of 25% this year and a path toward ~30% over 2–3 years; balance‑sheet metrics cited included exiting Q2 cash of $50 million, $131 million of revolver borrowings, net leverage ~0.5x and liquidity >$315 million, and management noted continued share repurchases (416k shares, ~$15M in Q2).Knowles Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
76
Positive
Cash Flow
67
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 635.00M | 593.20M | 553.50M | 456.80M | 478.80M | 868.10M |
| Gross Profit | 268.50M | 244.50M | 221.20M | 200.10M | 227.00M | 341.50M |
| EBITDA | 130.50M | 109.60M | 92.40M | 70.90M | 145.50M | 181.50M |
| Net Income | 67.50M | 44.20M | -239.50M | 72.40M | -430.10M | 150.40M |
Balance Sheet | ||||||
| Total Assets | 1.08B | 1.05B | 1.12B | 1.46B | 1.18B | 1.73B |
| Cash, Cash Equivalents and Short-Term Investments | 49.60M | 54.20M | 130.10M | 87.30M | 48.20M | 68.90M |
| Total Debt | 150.20M | 150.30M | 213.00M | 286.70M | 64.50M | 102.40M |
| Total Liabilities | 280.50M | 275.30M | 362.20M | 428.70M | 191.00M | 275.10M |
| Stockholders Equity | 795.50M | 775.80M | 756.00M | 1.03B | 992.90M | 1.46B |
Cash Flow | ||||||
| Free Cash Flow | 63.50M | 81.90M | 116.50M | 105.50M | 54.20M | 133.50M |
| Operating Cash Flow | 103.80M | 114.00M | 130.10M | 122.70M | 86.30M | 182.10M |
| Investing Cash Flow | -40.30M | -31.60M | 45.20M | -141.60M | -32.70M | -129.60M |
| Financing Cash Flow | -117.10M | -158.90M | -132.00M | 58.20M | -73.20M | -131.40M |
Knowles Risk Analysis
Knowles disclosed 22 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.63B | 60.10 | 6.72% | ― | 13.48% | 0.69% | |
68 Neutral | $3.13B | 46.32 | 8.70% | ― | 12.77% | 182.06% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $1.25B | -31.22 | -10.31% | ― | -27.47% | -181.91% | |
53 Neutral | $648.45M | -17.26 | -7.97% | ― | 3.66% | -200.01% | |
51 Neutral | $9.12B | -152.31 | -6.92% | ― | 30.59% | -1171.00% | |
48 Neutral | $689.29M | -19.01 | -24.02% | ― | 18.84% | 77.12% |
* Technology Sector Average
KN
Knowles
36.59
16.60
83.04%
ADTN
Adtran
8.51
-0.96
-10.14%
DGII
Digi International
69.72
38.02
119.94%
HLIT
Harmonic
11.55
2.92
33.84%
NTGR
Netgear
24.16
0.47
1.98%
VIAV
Viavi Solutions
36.95
26.94
269.13%
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.