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Knife River Corporation (KNF)
NYSE:KNF
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Knife River Corporation (KNF) AI Stock Analysis

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KNF

Knife River Corporation

(NYSE:KNF)

Rating:63Neutral
Price Target:
$88.00
▲(9.49% Upside)
Knife River Corporation's overall stock score reflects strong revenue growth and a record backlog, which are offset by declining margins, increased leverage, and cash flow challenges. The technical indicators suggest a bearish trend, and the valuation appears stretched. The earnings call provided mixed signals, with growth potential tempered by current operational challenges.
Positive Factors
Backlog and M&A Activity
The backlog is at a record level and the M&A engine humming along.
Growth through Acquisitions
High barriers to entry, combined with a fragmented market, offer plenty of opportunities for accretive acquisitions to drive growth.
Revenue and EBITDA Outlook
Management believes that the balance of the year will generate approximately 90% of annual revenue and 108% of annual EBITDA, indicating strong future performance.
Negative Factors
Guidance Reductions
The FY guidance was meaningfully reduced due to weather and Oregon issues.
Macroeconomic Uncertainty
There have been some slowdowns and project delays on the private side of the business given tariff and macroeconomic uncertainty.
Weather and Project Delays
Significant rain and Oregon project delay issues drove meaningfully lower construction activity in KNF territories during Q2, impacting results.

Knife River Corporation (KNF) vs. SPDR S&P 500 ETF (SPY)

Knife River Corporation Business Overview & Revenue Model

Company DescriptionKnife River Corporation provides aggregates-based construction materials and contracting services in the United States. It operates through six segments: Pacific, Northwest, Mountain, North Central, South, and Energy Services. The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete, as well as provides contracting services to support the aggregate-based product lines, including heavy-civil construction, asphalt and concrete paving, and site development and grading. It serves federal, state, and municipal governments for various projects, such as highways, bridges, airports, schools, public buildings, and other public-infrastructure projects. The company was founded in 1917 and is based in Bismarck, North Dakota.
How the Company Makes MoneyKnife River Corporation generates revenue through the sale of construction materials such as aggregate, asphalt, and ready-mix concrete. The company operates quarries and production facilities to extract and process raw materials, which are then sold to contractors and other businesses involved in construction projects. Additionally, Knife River offers contracting services, providing expertise in infrastructure development, paving, and site preparation. This dual approach allows the company to capitalize on both material sales and service contracts. Key revenue streams include long-term contracts with governmental agencies for public infrastructure projects, as well as partnerships with private construction firms for commercial and residential developments. Regional demand for construction and infrastructure development significantly influences its earnings.

Knife River Corporation Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Neutral
The earnings call revealed a mix of positive achievements, such as record backlog, successful acquisitions, and improved pricing initiatives, alongside challenges, including weather-related disruptions and a significant impact from the Oregon market. The company's strategic focus on growth and pricing discipline shows potential for recovery, but current challenges have led to a cautious outlook.
Q2-2025 Updates
Positive Updates
Record Backlog
Knife River Corporation reported a record backlog of $1.3 billion, the highest in the company's history, with $650 million in new projects secured during the quarter, a $250 million increase from the same time last year.
Strong Performance in West Segment
Aggregate volumes were up almost 60% this quarter in Alaska, while ready-mix volumes were up in both Hawaii and Alaska. California saw a 30% improvement in contracting services revenue over last year.
Increased Transportation Funding
The state of Washington increased its transportation funding by over $2 billion, and Idaho approved funding focused on relieving congestion. North Dakota passed a spending bill allocating $800 million a year over the next two years for road construction projects.
Successful Acquisitions
The acquisition of Strata drove record second-quarter volumes, revenue, and EBITDA. Strata and Albina accounted for about 8% of total revenue for the quarter.
Improved Pricing Initiatives
The company reported improved pricing on aggregates, ready-mix, and asphalt, with aggregate prices up almost 12% and ready-mix prices up 8% over last year.
Negative Updates
Weather-Related Disruptions
Unfavorable weather throughout the Central segment, particularly in Montana and Wyoming, led to rain on nearly 40% of available workdays, impacting revenue, volumes, and gross profit.
Challenges in Oregon
Oregon faced a 25% decline in aggregates volumes in the first half, affecting consolidated financial results and contributing over 50% to the EBITDA variance for the quarter and year-to-date.
Flooding in Texas
Torrential rain in Texas caused flooding, damaging infrastructure, including the Honey Creek quarry operations, which led to a temporary shutdown and reduced sales volumes for the third quarter.
Lowered Financial Guidance
The company lowered the midpoint of its adjusted EBITDA guidance by $55 million due to first-half headwinds from a softer Oregon market and wet weather.
Company Guidance
During the Knife River Corporation's second quarter earnings call for 2025, the company revised its financial guidance amidst several challenges and opportunities. The guidance was adjusted to reflect an expected consolidated revenue range of $3.1 billion to $3.3 billion and an adjusted EBITDA between $475 million and $525 million. The revision included a $55 million reduction in the midpoint of the adjusted EBITDA guidance, largely due to weather-related disruptions and a softer market in Oregon, which accounted for over 50% of the variance in both quarterly and annual results. Despite these challenges, the company has a record backlog of $1.3 billion, driven by $650 million in new projects secured during the quarter. The company anticipates growth in volume across all product lines, supported by record DOT budgets in its operational states, which are projected to grow by 14% for fiscal year 2026, compared to a 3% increase for the U.S. average. In terms of product lines, Knife River expects mid-single to high-single digit increases in aggregate pricing and low double-digit growth in ready-mix volumes for the year.

Knife River Corporation Financial Statement Overview

Summary
Knife River Corporation shows strong revenue growth, but declining margins and increased leverage pose potential risks. The cash flow situation is particularly concerning, with negative free cash flow growth and reduced cash generation relative to income. The company needs to address operational efficiencies and manage its debt levels to improve financial stability.
Income Statement
75
Positive
Knife River Corporation demonstrates solid revenue growth, with a TTM (Trailing-Twelve-Months) revenue increase of 91.8% compared to the previous year. However, margins have slightly decreased over time, with the TTM gross profit margin at 18.13% and net profit margin at 5.20%. The EBIT and EBITDA margins have also seen a decline, indicating potential cost pressures or operational inefficiencies.
Balance Sheet
65
Positive
The company's debt-to-equity ratio has increased significantly to 0.96 in the TTM period, indicating higher leverage and potential risk. Return on equity has decreased to 10.58%, reflecting reduced profitability on shareholder equity. The equity ratio remains stable, suggesting a balanced asset structure.
Cash Flow
55
Neutral
Knife River Corporation's cash flow performance is concerning, with a negative free cash flow growth rate of -245.25% in the TTM period. The operating cash flow to net income ratio has decreased to 0.62, indicating less cash generation relative to net income. The free cash flow to net income ratio is negative, highlighting cash flow challenges.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.95B2.90B2.83B2.53B2.23B2.18B
Gross Profit534.72M569.83M538.93M347.27M346.95M370.58M
EBITDA429.44M463.11M427.09M306.74M293.41M304.96M
Net Income153.28M201.68M182.87M116.22M129.75M147.32M
Balance Sheet
Total Assets3.63B2.85B2.60B2.51B2.18B0.00
Cash, Cash Equivalents and Short-Term Investments77.67M281.13M262.32M10.09M13.85M0.00
Total Debt1.40B726.76M726.37M730.96M734.52M0.00
Total Liabilities2.17B1.38B1.33B1.48B1.23B0.00
Stockholders Equity1.46B1.48B1.27B1.03B952.84M0.00
Cash Flow
Free Cash Flow-53.10M149.90M211.44M29.28M7.01M96.53M
Operating Cash Flow244.30M322.32M335.73M207.44M181.24M232.40M
Investing Cash Flow-886.50M-294.80M-117.89M-155.88M-398.27M-185.85M
Financing Cash Flow662.77M-8.71M34.39M-55.32M223.80M-47.95M

Knife River Corporation Technical Analysis

Technical Analysis Sentiment
Negative
Last Price80.37
Price Trends
50DMA
83.55
Negative
100DMA
87.86
Negative
200DMA
93.05
Negative
Market Momentum
MACD
-1.52
Positive
RSI
37.91
Neutral
STOCH
10.09
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KNF, the sentiment is Negative. The current price of 80.37 is below the 20-day moving average (MA) of 86.84, below the 50-day MA of 83.55, and below the 200-day MA of 93.05, indicating a bearish trend. The MACD of -1.52 indicates Positive momentum. The RSI at 37.91 is Neutral, neither overbought nor oversold. The STOCH value of 10.09 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KNF.

Knife River Corporation Risk Analysis

Knife River Corporation disclosed 45 risk factors in its most recent earnings report. Knife River Corporation 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

Knife River Corporation Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$7.55B16.5031.87%0.41%0.88%-4.17%
76
Outperform
$38.62B40.8611.89%0.65%0.19%4.33%
76
Outperform
$37.33B34.2912.10%0.51%1.02%-45.31%
74
Outperform
$3.26B12.3411.77%0.94%-5.26%-40.75%
73
Outperform
$14.01B8.997.12%0.90%-9.62%795.20%
63
Neutral
$4.45B29.2211.11%2.64%-22.49%
62
Neutral
$10.28B6.210.76%2.84%3.10%-36.03%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KNF
Knife River Corporation
80.37
5.33
7.10%
CX
Cemex SAB
9.40
3.81
68.16%
EXP
Eagle Materials
242.26
0.55
0.23%
MLM
Martin Marietta Materials
622.64
119.36
23.72%
VMC
Vulcan Materials
294.81
64.69
28.11%
BCC
Boise Cascade
90.02
-30.63
-25.39%

Knife River Corporation Corporate Events

Financial DisclosuresRegulatory Filings and Compliance
Knife River Corporation Reports Q2 2025 Earnings
Neutral
Aug 5, 2025

On August 5, 2025, Knife River Corporation announced its second quarter 2025 earnings. The announcement, which was also submitted to the Securities and Exchange Commission, could have implications for the company’s financial performance and stakeholder interests.

Executive/Board ChangesShareholder Meetings
Knife River Corporation Holds Annual Meeting with Key Approvals
Neutral
May 28, 2025

On May 22, 2025, Knife River Corporation held its Annual Meeting where four proposals were presented to stockholders. All company nominees for Class II directors were elected, the compensation for named executive officers was approved, Deloitte & Touche LLP was ratified as the independent registered public accounting firm for 2025, and an amendment to eliminate supermajority voting requirements was passed.

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: Aug 28, 2025