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Karat Packaging Inc (KRT)
NASDAQ:KRT
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Karat Packaging Inc
(NASDAQ:KRT)
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Rating:69Neutral
Price Target:
$23.50
▲(4.44% Upside)
Karat Packaging Inc's overall stock score reflects a balance of strengths and challenges. The most significant factor is the solid financial performance with stable revenue growth, though profitability and cash flow management need improvement. The valuation is attractive with a reasonable P/E ratio and high dividend yield. Technical analysis indicates a bearish trend, while the earnings call suggests confidence in future growth despite current financial pressures.
Karat Packaging Inc (KRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$459.07M
Dividend Yield7.67%
Average Volume (3M)136.09K
Price to Earnings (P/E)15.2
Beta (1Y)1.18
Revenue Growth8.93%
EPS Growth6.82%
CountryUS
Employees683
SectorN/A
Sector StrengthN/A
IndustryPackaging & Containers
Share Statistics
EPS (TTM)0.37
Shares Outstanding20,099,504
10 Day Avg. Volume172,780
30 Day Avg. Volume136,089
Financial Highlights & Ratios
PEG Ratio-2.53
Price to Book (P/B)3.89
Price to Sales (P/S)1.43
P/FCF Ratio13.78
Enterprise Value/Market Cap1.23
Enterprise Value/Revenue1.24
Enterprise Value/Gross Profit3.27
Enterprise Value/Ebitda8.86
Forecast
1Y Price Target
$35.00Price Target Upside55.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Karat Packaging Inc Business Overview & Revenue Model
Company DescriptionKarat Packaging Inc (KRT) is a leading provider of disposable foodservice packaging solutions headquartered in the United States. The company specializes in manufacturing and distributing a wide range of products, including paper and plastic food containers, cups, plates, cutlery, and straws. Serving various sectors such as restaurants, catering services, and retail, Karat Packaging aims to meet the growing demand for sustainable and eco-friendly packaging options while maintaining quality and affordability.
How the Company Makes MoneyKarat Packaging generates revenue primarily through the sale of its disposable foodservice products to a diverse customer base, including restaurants, food distributors, and retail chains. The company's revenue model is built on direct sales, wholesale distribution, and long-term contracts with key clients, which provide stable income streams. Additionally, Karat Packaging capitalizes on the increasing consumer preference for environmentally friendly products by offering sustainable packaging solutions, enabling them to tap into a growing market segment. Strategic partnerships with suppliers and distributors further enhance their market reach and drive sales. Overall, Karat Packaging's ability to innovate and adapt to market trends contributes significantly to its earnings.
Karat Packaging Inc Earnings Call Summary
Earnings Call Date:Nov 06, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 12, 2026
Earnings Call Sentiment Neutral
Despite strong sales growth and strategic expansions, the company faced significant challenges with decreased margins, lower net income, and softness in the retail channel. The introduction of a stock repurchase program and expansion in new product categories indicate confidence in future growth, but current financial pressures temper the overall outlook.Q3-2025 Updates
Positive Updates
Record Net Sales Growth
Karat Packaging achieved record net sales, increasing over 10% year-over-year, driven by solid volume expansion, a favorable product mix, and effective pricing initiatives.
Expansion in Paper Bag Business
Secured a major business add-on to supply paper bags, expected to contribute approximately $20 million in annual revenue, with plans to scale to $100 million within 2-3 years.
Successful Sourcing Diversification
Increased domestic sourcing to 20% and reduced imports from Taiwan to 42%, aiding in supply chain management despite higher import costs.
First-Ever Stock Repurchase Program
Announced a $15 million stock repurchase program, indicating confidence in future growth prospects.
Negative Updates
Decreased Gross Margin
Gross margin decreased to 34.5% from 38.6% in the prior year, impacted by higher import costs and tariffs.
Decline in Operating Income
Operating income decreased to $8.6 million from $11.3 million in the prior year quarter.
Net Income and EBITDA Decline
Net income for Q3 2025 was $7.6 million compared to $9.3 million in the prior year. Adjusted EBITDA was $13.1 million, down from $14.7 million.
Softness in Retail Channel
Sales to the retail channel were down 12.5% compared to the prior year quarter, reflecting overall retail sector softness.
Company Guidance
During the Karat Packaging Third Quarter 2025 Earnings Conference Call, the company provided several key metrics and guidance for the upcoming period. Net sales for Q3 were reported at $124.5 million, marking a 10.4% increase year-over-year, driven by a $9.4 million increase in volume and a favorable product mix impact of $3.5 million. The gross margin was sustained at 34.5%, despite higher import costs due to increased duties and tariffs, and the company projects this to remain between 33% to 35% for Q4. Adjusted EBITDA for Q3 was $13.1 million, with a margin of 10.5%, and the company anticipates a Q4 margin of 8% to 10%. The company also highlighted a new two-year contract to supply paper bags, expected to contribute approximately $20 million in additional annual revenue, with a projection to scale this business to more than $100 million annually over the next 2 to 3 years. The Board approved a quarterly dividend of $0.45 per share and initiated a $15 million share repurchase program, reflecting confidence in future growth. For Q4, net sales are expected to increase by 10% to 14% over the previous year.Karat Packaging Inc Financial Statement Overview
Summary
Income Statement
75
Positive
Balance Sheet
70
Positive
Cash Flow
60
Neutral
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Karat Packaging Inc Technical Analysis
Neutral
22.50
Price Trends
22.84
Positive
23.64
Negative
25.24
Negative
Market Momentum
0.24
Negative
61.14
Neutral
91.70
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRT, the sentiment is Neutral. The current price of 22.5 is above the 20-day moving average (MA) of 22.24, below the 50-day MA of 22.84, and below the 200-day MA of 25.24, indicating a neutral trend. The MACD of 0.24 indicates Negative momentum. The RSI at 61.14 is Neutral, neither overbought nor oversold. The STOCH value of 91.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for KRT.
Karat Packaging Inc Peers Comparison
UnderperformOutperform
Sector (―)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | ― | ― | ― | ― | ― | ― | |
69 Neutral | $723.47M | 25.97 | 9.92% | 2.79% | 0.26% | 78.05% | |
69 Neutral | $1.43B | 32.66 | 6.26% | 0.46% | 11.83% | 67.28% | |
69 Neutral | $459.07M | 15.23 | 19.43% | 7.67% | 8.93% | 6.82% | |
53 Neutral | $459.00M | ― | -6.68% | ― | 9.54% | -81.46% | |
45 Neutral | $11.79M | -12.83 | -7.12% | ― | 4.41% | 55.72% |
* Sector Average
KRT
Karat Packaging Inc
22.84
-5.27
-18.75%
YHGJ
Yunhong Green CTI
4.25
-0.45
-9.57%
DSS
DSS
0.95
0.12
14.46%
MYE
Myers Industries
19.34
8.34
75.82%
TRS
Trimas
35.13
10.76
44.15%
PACK
Ranpak Holdings
5.44
-1.69
-23.70%
Karat Packaging Inc Corporate Events
Stock BuybackDividends
Karat Packaging Inc Announces Dividend and Share Buyback
Positive
Nov 5, 2025
On November 4, 2025, Karat Packaging Inc. announced a regular quarterly cash dividend of $0.45 per share, payable on November 28, 2025, to shareholders recorded by November 21, 2025. The company also initiated its first-ever share repurchase program, authorizing the buyback of up to $15 million of its common stock. This move reflects the board’s confidence in the company’s growth potential and financial strength, aiming to deliver long-term value to shareholders. The repurchase program, which has no expiration, will be conducted in compliance with securities laws and does not obligate the company to repurchase any specific amount.
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.