Karat Packaging Inc (KRT) AI Stock Analysis

• Market Cap: $570.98M
• Dividend Yield: 6.33%
• Average Volume (3M): 115.14K
• Price to Earnings (P/E): 19.0
• Beta (1Y): 1.21
• Revenue Growth: 6.21%
• EPS Growth: 1.47%
• Country: US
• Employees: 683
• Sector: Consumer Cyclical
• Sector Strength: 65
• Industry: Packaging & Containers
• EPS (TTM): 0.33
• Shares Outstanding: 20,076,506
• 10 Day Avg. Volume: 63,809
• 30 Day Avg. Volume: 115,142
• PEG Ratio: 28.36
• Price to Book (P/B): 3.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.87
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: 0.38
• Enterprise Value/Gross Profit: 3.84
• Enterprise Value/Ebitda: 2.72
• 1Y Price Target: $35.00
• Price Target Upside: 23.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: $32.00 ▲(13.31%Upside)

Karat Packaging Inc's strong financial performance and strategic initiatives, such as supply chain diversification and stable dividend payouts, significantly bolster its overall score. While technical indicators are neutral, the company's valuation and positive earnings call outlook support a favorable long-term investment perspective.

Positive Factors

Earnings

Shares are expected to open higher after a first-quarter beat and second-quarter guide above expectations.

Growth Opportunities

Karat's strong cash flow and proactive expansion of distribution capabilities are allowing it to capitalize on growth opportunities despite broader macro uncertainty.

Supply Chain

The company’s ability to flexibly source products from various countries makes the company resilient to potential tariff uncertainties and supply chain disruptions.

Negative Factors

Costs

Fourth-quarter EPS missed expectations despite sales and gross margin that were in line, due to higher SG&A.

Margins

The risk is that the price increases will not be enough to maintain margins and volumes could take a dive.

Tariffs

Tariffs loom as a big second-half risk, encouraging investors to proceed with caution until more tariff clarity comes.

Karat Packaging Inc Business Overview & Revenue Model

Company Description

Karat Packaging Inc. manufactures and distributes single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company offers its products to domestic and regional distributors, restaurant chains, retail establishments, and online customers. It also provides new product development, design, printing, and logistics services. Karat Packaging Inc. was founded in 2000 and is based in Chino, California.

How the Company Makes Money

Karat Packaging Inc generates revenue through the sale of its disposable foodservice products to a diverse customer base, including restaurants, cafes, catering companies, and food retailers. The company's revenue model is centered around manufacturing and distributing a variety of packaging solutions, with a significant focus on sustainable and environmentally friendly products. Partnerships with distributors and direct sales to end-users form key revenue streams. Additionally, the company's commitment to innovation in sustainable packaging helps to attract environmentally conscious businesses looking to enhance their sustainability practices, contributing to its overall earnings.

Karat Packaging Inc Financial Statement Overview

Summary

Karat Packaging Inc exhibits excellent financial health, characterized by consistent revenue and margin growth, a sound balance sheet, and strong cash flow generation. Despite increased leverage, the company maintains a healthy capital structure and offers attractive returns to shareholders.

Income Statement

Karat Packaging Inc has demonstrated strong revenue growth with Total Revenue rising from $364.24 million in 2021 to $430.64 million in TTM (Trailing-Twelve-Months) 2025, marking consistent growth over years. Gross Profit Margin remains robust at around 38.6% in TTM, supported by effective cost management. The Net Profit Margin has improved to 7% in TTM 2025, indicating a healthy operational efficiency. EBIT and EBITDA margins are stable, reinforcing the company's profitability and operational strength.

Balance Sheet

The Balance Sheet depicts a stable financial position with Stockholders' Equity rising to $153.31 million in TTM 2025. The Debt-to-Equity Ratio has increased, reflecting higher leverage, but remains manageable. Return on Equity stands at 19.7% in TTM, showcasing strong returns for shareholders. The Equity Ratio is moderate, indicating a balanced capital structure.

Cash Flow

Cash Flow analysis highlights robust Free Cash Flow growth, with a marked increase in Operating Cash Flow to $49.15 million in TTM 2025. The Free Cash Flow to Net Income Ratio is solid, denoting effective cash conversion. The company has maintained strong cash generation, supporting its investment and financing activities.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	422.63M	405.65M	422.96M	364.24M	295.52M
Gross Profit	164.33M	153.04M	132.09M	107.83M	89.13M
EBITDA	37.76M	60.78M	48.76M	33.19M	36.27M
Net Income	29.98M	32.47M	23.65M	20.78M	17.52M
Balance Sheet
Total Assets	294.52M	276.40M	252.18M	207.60M	181.10M
Cash, Cash Equivalents and Short-Term Investments	59.93M	49.42M	16.04M	6.48M	448.00K
Total Debt	92.87M	71.00M	58.65M	36.52M	98.55M
Total Liabilities	129.95M	113.71M	100.24M	75.57M	141.24M
Stockholders Equity	155.57M	154.12M	141.68M	122.90M	32.40M
Cash Flow
Free Cash Flow	43.91M	44.05M	14.73M	-3.70M	-21.93M
Operating Cash Flow	47.98M	53.38M	29.47M	8.68M	14.55M
Investing Cash Flow	-5.86M	-30.17M	-17.84M	-13.28M	-37.35M
Financing Cash Flow	-31.29M	-16.17M	-2.07M	10.64M	22.45M

Karat Packaging Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.24
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRT, the sentiment is Negative. The current price of 28.24 is above the 20-day moving average (MA) of 28.20, below the 50-day MA of 29.16, and above the 200-day MA of 28.19, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 46.18 is Neutral, neither overbought nor oversold. The STOCH value of 24.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KRT.

Karat Packaging Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KRT	73 Outperform	$570.98M	18.96	19.64%	6.33%	6.21%	1.47%
TRS	70 Outperform	$1.19B	38.13	4.64%	0.55%	3.80%	-20.92%
AMBP	70 Outperform	$2.75B	―	-69.06%	8.70%	4.42%	70.21%
MYE	66 Neutral	$550.27M	52.59	3.69%	3.67%	3.92%	-73.64%
OI	65 Neutral	$2.23B	―	-13.85%	―	-5.29%	18.22%
PACK	59 Neutral	$293.13M	―	-3.89%	―	10.11%	6.77%
Sector *	56 Neutral	HK$25.30B	3.94	-2.03%	6.16%	-0.31%	-67.70%

Karat Packaging Inc Corporate Events

Karat Packaging Inc Elects Directors at Annual Meeting

At the 2025 Annual Meeting of Stockholders held on June 19, Karat Packaging Inc. elected five directors, including Alan Yu and Jian Guo, to serve until the next annual meeting. Additionally, stockholders ratified PricewaterhouseCoopers LLP as the company’s independent accountants for the fiscal year ending December 31, 2025, and approved the executive compensation plan.

The most recent analyst rating on (KRT) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Karat Packaging Inc stock, see the KRT Stock Forecast page.

Karat Packaging Inc Announces Secondary Stock Offering

On June 10, 2025, Karat Packaging Inc. announced a secondary offering of 1,500,000 shares of its common stock by certain members of its management team, with BofA Securities and William Blair & Company acting as joint lead book-runners. The company will not offer any shares or receive proceeds from this sale, which is conducted under a shelf registration statement filed with the SEC. The offering includes a 30-day option for underwriters to purchase an additional 225,000 shares. This move is part of the company’s strategic financial operations, potentially impacting its market positioning and stakeholder interests.

The most recent analyst rating on (KRT) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Karat Packaging Inc stock, see the KRT Stock Forecast page.

Karat Packaging Declares Quarterly Dividend Announcement

On May 6, 2025, Karat Packaging Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.45 per share on the company’s common stock. This dividend is scheduled to be paid on or about May 23, 2025, to stockholders of record as of May 16, 2025, reflecting the company’s commitment to providing value to its shareholders.