Karat Packaging Inc (KRT) AI Stock Analysis

• Market Cap: $482.63M
• Dividend Yield: 7.29%
• Average Volume (3M): 118.50K
• Price to Earnings (P/E): 15.1
• Beta (1Y): 1.23
• Revenue Growth: 7.99%
• EPS Growth: 13.05%
• Country: US
• Employees: 683
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Packaging & Containers
• EPS (TTM): 0.57
• Shares Outstanding: 20,092,754
• 10 Day Avg. Volume: 108,004
• 30 Day Avg. Volume: 118,499
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.28
• Enterprise Value/Revenue: 1.39
• Enterprise Value/Gross Profit: 3.56
• Enterprise Value/Ebitda: 9.41
• 1Y Price Target: $33.00
• Price Target Upside: 37.39% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 77 Outperform
• Price Target: $28.00 ▲(16.57% Upside)

Karat Packaging Inc shows strong financial performance with robust revenue growth and efficient cost management. The valuation is attractive with a reasonable P/E ratio and high dividend yield. The earnings call highlighted strategic initiatives and operational efficiencies, although challenges like tariffs and currency impacts remain. Technical indicators suggest neutral momentum, warranting cautious optimism.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for products, enhancing market position and supporting long-term business expansion.

Supply Chain Diversification

Diversifying supply chain reduces geopolitical risks and ensures stability, supporting sustainable operations and cost management.

Operational Efficiency

Improved operational efficiency enhances profitability, ensuring better resource utilization and competitive advantage.

Negative Factors

Unfavorable Pricing Impact

Unfavorable pricing pressures can erode margins, impacting profitability and necessitating strategic pricing adjustments.

Higher Freight Costs

Rising freight costs increase operational expenses, potentially squeezing margins and affecting cost competitiveness.

Foreign Currency Loss

Foreign currency losses can impact net income, highlighting the need for effective currency risk management strategies.

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 generates revenue through the sale of its diverse line of disposable packaging products to customers in the food service and retail industries. Key revenue streams include direct sales, distribution agreements, and long-term contracts with major food service companies and restaurants. Additionally, the company benefits from strategic partnerships with suppliers and logistics providers that enable efficient production and distribution. Factors contributing to its earnings include the increasing demand for takeout and delivery services, a growing emphasis on sustainability, and the expansion of its product offerings to include eco-friendly packaging solutions.

Karat Packaging Inc Financial Statement Overview

Summary

Karat Packaging Inc exhibits strong financial health with robust revenue growth, efficient cost management, and improved leverage. The company maintains healthy profitability margins and a strong return on equity. While cash flow management is generally solid, attention to free cash flow growth is necessary to sustain long-term financial stability.

Income Statement

Karat Packaging Inc shows strong revenue growth with a TTM increase of 2.64% and consistent gross profit margins around 39%. The net profit margin is stable at 7.25%, indicating effective cost management. EBIT and EBITDA margins are healthy, reflecting operational efficiency. Overall, the income statement demonstrates robust growth and profitability.

Balance Sheet

The company has improved its debt-to-equity ratio to 0.33 in TTM, indicating better leverage management compared to previous years. Return on equity is strong at 20.61%, showcasing effective use of equity to generate profits. The equity ratio is stable, reflecting a balanced asset structure. Overall, the balance sheet shows improved financial stability and efficient capital utilization.

Cash Flow

Operating cash flow remains strong, though free cash flow growth is slightly negative at -2.73% in TTM. The free cash flow to net income ratio is over 1, indicating good cash conversion. However, the decline in free cash flow growth suggests potential challenges in cash generation. Overall, cash flow management is solid but requires attention to maintain growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	442.03M	422.63M	405.65M	422.96M	364.24M	295.52M
Gross Profit	173.19M	164.33M	153.04M	132.09M	107.83M	89.13M
EBITDA	65.52M	61.12M	60.78M	48.76M	40.48M	34.42M
Net Income	32.05M	29.98M	32.47M	23.65M	20.78M	17.52M
Balance Sheet
Total Assets	320.96M	294.52M	276.40M	252.18M	207.60M	181.10M
Cash, Cash Equivalents and Short-Term Investments	30.55M	59.93M	49.42M	16.04M	6.48M	448.00K
Total Debt	51.43M	92.87M	71.00M	58.65M	36.52M	98.55M
Total Liabilities	158.26M	132.32M	113.71M	100.24M	75.57M	141.24M
Stockholders Equity	155.85M	155.57M	154.12M	141.68M	122.90M	32.40M
Cash Flow
Free Cash Flow	46.90M	43.91M	44.05M	14.73M	-3.70M	-21.93M
Operating Cash Flow	45.20M	47.98M	53.38M	29.47M	8.68M	14.55M
Investing Cash Flow	3.61M	-5.86M	-30.17M	-17.84M	-13.28M	-37.35M
Financing Cash Flow	-37.58M	-33.62M	-16.17M	-2.07M	10.64M	22.45M

Karat Packaging Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 24.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 24.02 is below the 20-day moving average (MA) of 24.39, below the 50-day MA of 24.61, and below the 200-day MA of 26.89, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 43.17 is Neutral, neither overbought nor oversold. The STOCH value of 10.02 is Positive, 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	―	$482.63M	15.12	20.44%	7.29%	7.99%	13.05%
MYE	―	$648.28M	23.27	9.92%	3.10%	1.11%	-74.94%
TRS	―	$1.44B	33.03	6.26%	0.41%	11.83%	67.28%
Sector *	―	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
PACK	―	$447.19M	-12.85	-6.68%	―	10.38%	-123.75%
YHGJ	―	$14.56M	-10.67	-9.89%	―	5.70%	35.09%

Karat Packaging Inc Corporate Events

Karat Packaging’s Strong Q2 Performance Amid Challenges

Karat Packaging, Inc. recently held its second-quarter earnings call, revealing a generally positive sentiment despite some challenges. The company reported significant growth in sales, income, and operational efficiency, driven by strategic diversification and new business acquisitions. However, they also acknowledged hurdles such as unfavorable pricing, increased freight costs, and currency losses, with an anticipated decline in gross margin next quarter.

Karat Packaging Reports Record Second Quarter Results

Karat Packaging Inc. is a specialty distributor and manufacturer of environmentally friendly, disposable foodservice products, serving national and regional restaurants across the United States. The company is known for its eco-friendly Karat Earth® line and offers customized solutions including new product development and logistics services.

Karat Packaging Announces Quarterly Dividend Declaration

On August 5, 2025, Karat Packaging Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.45 per share on its common stock. This dividend is set to be paid on or about August 27, 2025, to stockholders of record as of August 20, 2025, reflecting the company’s commitment to returning value to its shareholders.

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.