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Knowles Corporation (KN)
:KN
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Knowles (KN) AI Stock Analysis

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KN

Knowles

(NYSE:KN)

Rating:68Neutral
Price Target:
$22.50
▲(12.56% Upside)
The overall stock score reflects strong technical momentum and positive earnings call sentiment, offset by concerns over valuation and financial performance. Knowles shows potential for growth through strategic initiatives, but profitability and valuation concerns temper the outlook.
Positive Factors
Earnings
Knowles posted better results and guidance, benefiting from broad-based strength across all its end markets.
Product Development
Knowles highlighted new growth areas with the launch of its Ceramic Inductor line and MedTech Micro Solutions, which could provide upside to CAGR targets.
Stock Repurchase
Knowles may use as much as 50% of FCF for share repurchases, as the Board authorized an additional $150 million of repurchases.
Negative Factors
Analyst Rating
Analyst remains Neutral as continued progress on the recovery is awaited.
Tariffs
Management continues to see minimal impact from tariffs, with U.S. production mostly matching local demand and Asia production serving China and Europe.

Knowles (KN) vs. SPDR S&P 500 ETF (SPY)

Knowles Business Overview & Revenue Model

Company DescriptionKnowles Corporation offers micro-acoustic microphones and balanced armature speakers, audio solutions, high performance capacitors, and radio frequency products for the consumer electronics, medtech, defense, electric vehicle, industrial, and communications markets. It operates in two segments, Audio and Precision Devices (PD). The Audio segment designs and manufactures audio products, including microphones, balanced armature speakers, and audio processors used in applications that serve the mobile, hearing health, True Wireless Stereo, Internet of Things, and computing markets. The PD segment is involved in the design and delivery of high-performance capacitor products and RF solutions that are used in applications, such as power supplies and medical implants, satellite communications, and radar systems, as well as for communications equipment. The company sells its products directly to original equipment manufacturers and to their contract manufacturers and suppliers, as well as through distributors. It has operations in Asia, the United States, Europe, other Americas, and internationally. The company was founded in 1946 and is headquartered in Itasca, Illinois.
How the Company Makes MoneyKnowles Corporation generates revenue through the sale of its advanced audio solutions, precision devices, and specialty components. The company's key revenue streams include sales from its Audio segment, which provides microphones and balanced armature speakers for mobile, consumer electronics, and audio markets. Additionally, the Precision Devices segment contributes to revenue through the sale of components such as capacitors and timing devices for critical applications in telecom, industrial, and aerospace sectors. Knowles also engages in strategic partnerships and collaborations with leading technology companies to enhance its product offerings and expand its market reach, further driving its revenue growth.

Knowles Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q2-2025)
|
% Change Since: 7.13%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call indicates strong performance with notable revenue and EPS growth, positive market outlook, and successful execution of the company's strategy. Challenges include gross margin pressure and existing debt levels, but highlights significantly outweigh lowlights.
Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Q2 2025 revenue of $146 million, up 8% year-over-year, exceeding the high end of guidance.
EPS Increase
Q2 EPS of $0.24, up 20% year-over-year, above the midpoint of guidance.
Cash Flow and Share Buybacks
Cash from operations of $36 million, exceeding the high end of guidance; repurchased $30 million in shares.
MedTech & Specialty Audio Growth
Revenue of $67 million, up 13% sequentially and 10% year-over-year, driven by demand in Hearing Health and Specialty Audio.
Precision Devices Performance
Revenue of $79 million, up 8% sequentially and 6% year-over-year, with positive bookings trends for three consecutive quarters.
Positive Market Outlook
Expecting continued sequential and year-over-year growth for the remainder of 2025, with strong backlog and order activity.
New Product Lines
Expansion of specialty film production and introduction of a new inductor line to drive future growth.
Negative Updates
Gross Margin Pressure
Q2 gross margins were 50.6%, down 280 basis points year-over-year due to unfavorable product mix and higher factory costs.
Debt Levels
Company carries $190 million of debt, including borrowings under a revolving credit facility.
Company Guidance
During the Q2 2025 earnings call, Knowles Corporation provided optimistic guidance for the future, highlighting several key metrics. The company reported Q2 revenue of $146 million, marking an 8% year-over-year increase, and cash from operations of $36 million, both figures exceeding the high end of their guidance range. Earnings per share (EPS) reached $0.24, a 20% rise from the prior year, also surpassing guidance expectations. Looking ahead to Q3 2025, Knowles anticipates revenue between $144 million and $154 million, with expected EPS ranging from $0.29 to $0.33. The company expects to maintain strong cash generation, projecting operating cash flow of 16% to 20% of revenues for the full year. Gross margins are expected to improve, driven by higher production volumes, with an adjusted EBIT margin projection of 22% to 24%. Knowles is confident in its organic growth prospects, supported by new design wins and capacity expansions, such as the specialty film line and the introduction of an inductor product line. Additionally, the company repurchased $30 million in shares during Q2, reflecting robust cash flow and a strategic focus on capital allocation.

Knowles Financial Statement Overview

Summary
Knowles faces challenges in revenue growth and profitability, as evidenced by its income statement. The balance sheet indicates moderate financial stability, but declining equity and profitability are concerns. Cash flow remains a relatively strong point, with adequate operating cash flow.
Income Statement
42
Neutral
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.
Balance Sheet
55
Neutral
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.
Cash Flow
60
Neutral
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue553.50M707.60M764.70M868.10M764.30M
Gross Profit234.80M283.40M276.30M359.50M271.20M
EBITDA51.80M98.90M-360.00M184.90M110.50M
Net Income-239.50M72.40M-430.10M150.40M2.90M
Balance Sheet
Total Assets1.12B1.46B1.18B1.73B1.65B
Cash, Cash Equivalents and Short-Term Investments130.10M87.30M48.20M68.90M147.80M
Total Debt213.00M286.70M60.60M96.10M194.00M
Total Liabilities362.20M428.70M191.00M272.10M351.40M
Stockholders Equity756.00M1.03B992.90M1.46B1.30B
Cash Flow
Free Cash Flow116.50M105.50M54.20M133.50M96.20M
Operating Cash Flow130.10M122.70M86.30M182.10M128.10M
Investing Cash Flow45.20M-141.60M-32.70M-129.60M-35.10M
Financing Cash Flow-132.00M58.20M-73.20M-131.40M-23.90M

Knowles Technical Analysis

Technical Analysis Sentiment
Positive
Last Price19.99
Price Trends
50DMA
17.95
Positive
100DMA
16.79
Positive
200DMA
17.72
Positive
Market Momentum
MACD
0.70
Negative
RSI
61.94
Neutral
STOCH
53.29
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 19.99 is above the 20-day moving average (MA) of 19.03, above the 50-day MA of 17.95, and above the 200-day MA of 17.72, indicating a bullish trend. The MACD of 0.70 indicates Negative momentum. The RSI at 61.94 is Neutral, neither overbought nor oversold. The STOCH value of 53.29 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 (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
$796.54M14.4330.02%4.60%3.73%11.24%
75
Outperform
$993.12M14.8716.36%24.14%16.17%
71
Outperform
$1.17B28.277.30%-4.47%195.28%
68
Neutral
$1.71B70.243.60%-28.85%
65
Neutral
$694.46M11.5312.97%0.76%
61
Neutral
$2.86B-12.48%-1.43%
50
Neutral
AU$1.62B3.22-31.35%3.49%16.14%-6.73%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KN
Knowles
19.93
2.70
15.67%
DGII
Digi International
31.56
3.98
14.43%
HLIT
Harmonic
8.73
-4.55
-34.26%
ITRN
Ituran Location And Control
40.04
15.32
61.97%
NTGR
Netgear
23.94
8.58
55.86%
VSAT
ViaSat
21.29
-3.20
-13.07%

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.

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.Date of analysis: Jul 29, 2025