Karat Packaging Inc (KRT)
NASDAQ:KRT
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Karat Packaging Inc
(NASDAQ:KRT)
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Rating:73Outperform
Price Target:
$30.00
▲(2.28% Upside)
Action:ReiteratedDate:03/14/26
The score is driven primarily by strong financial positioning (debt-free balance sheet, growing equity, solid profitability) and attractive valuation (moderate P/E and high dividend yield). Offsetting factors are weak near-term technical momentum (oversold/negative MACD) and earnings-call risks from tariff- and import-cost pressure, even though management’s 2026 growth and margin-improvement guidance is supportive.
Positive Factors
Debt-free Balance Sheet
Elimination of debt and a materially larger equity base materially lowers financial risk and increases strategic optionality. Over the next 2–6 months this supports sustained dividends, buybacks, investments in SKU expansion or sourcing diversity, and resilience to macro shocks.
Negative Factors
Tariff-driven Margin Pressure
Structural increases in duties and import-related costs compress gross margins and may persist absent permanent sourcing or pricing shifts. Sustained tariff exposure reduces reinvestment capacity and pressures long-run profitability unless mitigated by supply diversification or higher effective pricing.
Read all positive and negative factors
Positive Factors
Negative Factors
Debt-free Balance Sheet
Elimination of debt and a materially larger equity base materially lowers financial risk and increases strategic optionality. Over the next 2–6 months this supports sustained dividends, buybacks, investments in SKU expansion or sourcing diversity, and resilience to macro shocks.
Read all positive factors
Karat Packaging Inc (KRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$585.54M
Dividend Yield7.94%
Average Volume (3M)79.67K
Price to Earnings (P/E)14.4
Beta (1Y)1.01
Revenue Growth8.93%
EPS Growth6.82%
CountryUS
Employees683
SectorConsumer Cyclical
Sector Strength84
IndustryPackaging & Containers
Share Statistics
EPS (TTM)0.34
Shares Outstanding19,963,732
10 Day Avg. Volume68,579
30 Day Avg. Volume79,675
Financial Highlights & Ratios
PEG Ratio3.08
Price to Book (P/B)3.03
Price to Sales (P/S)0.97
P/FCF Ratio15.45
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue1.35
Enterprise Value/Gross Profit3.67
Enterprise Value/Ebitda10.14
Forecast
1Y Price Target
$29.50Price Target Upside0.58% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)1.71
Revenue Forecast (FY)$523.55M
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, ...
How the Company Makes Money
Karat Packaging makes money primarily by selling disposable foodservice packaging and related supplies to foodservice customers through multiple distribution channels. Its core revenue stream is product sales (e.g., cups, lids, food containers, ut...
Karat Packaging Inc Earnings Call Summary
Earnings Call Date:Mar 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive tone: the company delivered strong top-line growth, improved operating efficiency, robust cash generation, meaningful returns to shareholders, and expanding eco-friendly and paper bag businesses. Key near-term guidance is constructive (Q1 and full-year 2026). However, meaningful margin pressure from higher tariffs, duties and import costs, a decline in gross margin versus the prior year, freight/energy uncertainty, and weather-related disruptions pose tangible near-term risks. On balance, the favorable operational execution, cash flow and growth drivers outweigh the current headwinds, with management expecting tariff and FX tailwinds to help margins later in the year.Positive Updates
Top-line Growth and Volume Expansion
Net sales of $115.6M in Q4 2025, up 13.7% from $101.6M a year ago; growth driven by double-digit volume growth across major markets and a $6.3M favorable impact from pricing and product mix (volume contributed ~$8.2M). Pricing turned positive for the first time since early 2023.
Negative Updates
Gross Margin Compression from Tariffs and Import Costs
Gross margin declined to 34.0% in Q4 2025 from 39.2% a year ago (down 5.2 percentage points). Gross profit was $39.3M vs $39.8M prior-year. Import-related costs (including duties and tariffs) increased significantly, with import costs rising to 14.5% of net sales from 8.3% (increase of 6.2 percentage points) and tariff/duty charges increasing ~$8.4M.
Read all updates
Q4-2025 Updates
Positive
Negative
Top-line Growth and Volume Expansion
Net sales of $115.6M in Q4 2025, up 13.7% from $101.6M a year ago; growth driven by double-digit volume growth across major markets and a $6.3M favorable impact from pricing and product mix (volume contributed ~$8.2M). Pricing turned positive for the first time since early 2023.
Read all positive updates
Company Guidance
Management guided 1Q 2026 net sales to increase roughly 8–10% year‑over‑year, with 1Q gross margin expected at 34–36% and 1Q adjusted EBITDA margin at 9–11%; for full‑year 2026 they expect net sales to grow in the low double‑digit range versus 2025 and anticipate year‑over‑year improvements in both gross margin and adjusted EBITDA margin. Management also said margin tailwinds from favorable tariff developments and stabilized USD/NTD FX should begin to be realized in Q2, that 2026 online sales are expected to be double‑digit, and noted 1Q is weather‑sensitive though momentum has picked up in March.Karat Packaging Inc Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
86
Very Positive
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 467.74M | 422.63M | 405.65M | 422.96M | 364.24M |
| Gross Profit | 172.14M | 164.33M | 153.04M | 132.09M | 107.83M |
| EBITDA | 62.25M | 61.12M | 60.78M | 48.76M | 40.48M |
| Net Income | 31.48M | 29.98M | 32.47M | 23.65M | 20.78M |
Balance Sheet | |||||
| Total Assets | 287.69M | 294.52M | 276.40M | 252.18M | 207.60M |
| Cash, Cash Equivalents and Short-Term Investments | 37.88M | 59.93M | 49.42M | 16.04M | 6.48M |
| Total Debt | 57.00M | 92.87M | 71.00M | 58.65M | 36.52M |
| Total Liabilities | 130.82M | 132.32M | 113.71M | 100.24M | 75.57M |
| Stockholders Equity | 149.42M | 155.57M | 154.12M | 141.68M | 122.90M |
Cash Flow | |||||
| Free Cash Flow | 29.31M | 43.91M | 44.05M | 14.73M | -3.70M |
| Operating Cash Flow | 33.81M | 47.98M | 53.38M | 29.47M | 8.68M |
| Investing Cash Flow | 24.14M | -5.86M | -30.17M | -17.84M | -13.28M |
| Financing Cash Flow | -51.66M | -33.62M | -16.17M | -2.07M | 10.64M |
Karat Packaging Inc Technical Analysis
Positive
29.33
Price Trends
25.67
Positive
24.06
Positive
24.30
Positive
Market Momentum
0.95
Negative
69.35
Neutral
80.48
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRT, the sentiment is Positive. The current price of 29.33 is above the 20-day moving average (MA) of 27.34, above the 50-day MA of 25.67, and above the 200-day MA of 24.30, indicating a bullish trend. The MACD of 0.95 indicates Negative momentum. The RSI at 69.35 is Neutral, neither overbought nor oversold. The STOCH value of 80.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KRT.
Karat Packaging Inc Risk Analysis
Karat Packaging Inc disclosed 55 risk factors in its most recent earnings report. Karat Packaging Inc 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
Karat Packaging Inc Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $585.54M | 14.38 | 20.54% | 7.94% | 8.93% | 6.82% | |
64 Neutral | $820.63M | 20.03 | 12.22% | 2.80% | 0.26% | 78.05% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $1.43B | 11.92 | 16.97% | 0.45% | 11.83% | 67.28% | |
46 Neutral | $316.86M | -12.01 | -7.11% | ― | 9.54% | -81.46% | |
42 Neutral | $7.82M | -3.83 | -6.77% | ― | 4.41% | 55.72% |
* Consumer Cyclical Sector Average
KRT
Karat Packaging Inc
29.33
6.12
26.38%
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-8.29
-73.36%
DSS
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0.06
7.80%
MYE
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21.94
12.19
125.07%
TRS
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37.91
16.56
77.56%
PACK
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3.74
-0.47
-11.16%
Karat Packaging Inc Corporate Events
Dividends
Karat Packaging Declares Regular Quarterly Cash Dividend
Positive
Feb 6, 2026
On February 5, 2026, Karat Packaging Inc.’s board of directors declared a regular quarterly cash dividend of $0.45 per share on its common stock, reinforcing the company’s practice of returning capital to shareholders. The dividend, an...
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.