Key Tronic (KTCC) AI Stock Analysis

• Market Cap: $36.70M
• Dividend Yield: N/A
• Average Volume (3M): 26.12K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.47
• Revenue Growth: -16.49%
• EPS Growth: -198.42%
• Country: US
• Employees: 4,122
• Sector: Technology
• Sector Strength: 85
• Industry: Computer Hardware
• EPS (TTM): -0.36
• Shares Outstanding: 10,761,871
• 10 Day Avg. Volume: 43,384
• 30 Day Avg. Volume: 26,116
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 3.82
• Enterprise Value/Revenue: 0.29
• Enterprise Value/Gross Profit: 3.61
• Enterprise Value/Ebitda: 15.94
• 1Y Price Target: $3.00
• Price Target Upside: -16.90% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 52 Neutral
• Price Target: $3.00 ▼(-16.90% Downside)

Key Tronic's stock score reflects significant financial challenges, including declining revenues and negative profitability, which weigh heavily on its valuation score. However, improvements in gross margins and strategic expansions, as discussed in the earnings call, provide some positive outlook. Technical indicators show mixed signals, suggesting caution for investors.

Positive Factors

Gross Margin Improvement

Improved gross margins indicate effective cost management and operational efficiency, which can enhance profitability and competitiveness over time.

Expansion Plans

Expansion into new regions can increase production capabilities and market reach, supporting long-term growth and diversification of revenue streams.

New Business Wins

Securing new business programs diversifies the client base and enhances revenue potential, contributing to sustained business growth and resilience.

Negative Factors

Revenue Decline

Declining revenue reflects challenges in maintaining market share and demand, posing risks to long-term financial health and strategic objectives.

Increased Year-to-Date Net Loss

Rising net losses indicate ongoing profitability issues, which could strain financial resources and hinder future investment and growth opportunities.

Challenges with Tariffs

Tariff-related uncertainties can impact cost structures and pricing strategies, affecting competitive positioning and profitability in key markets.

Key Tronic Business Overview & Revenue Model

Company Description

Key Tronic Corporation provides contract manufacturing services to original equipment manufacturers in the United States and internationally. The company offers integrated electronic and mechanical engineering, assembly, sourcing and procurement, logistics, and new product testing services. Its services include product design; surface mount technologies and pin through hole capability for printed circuit board assembly; tool making; precision plastic molding; sheet metal fabrication and painting; liquid injection molding; complex assembly; automated tape winding; prototype design; and full product assembly services. The company also manufactures and sells keyboards and other input devices. It markets its products and services primarily through field sales people and distributors. Key Tronic Corporation was incorporated in 1969 and is headquartered in Spokane Valley, Washington.

How the Company Makes Money

Key Tronic makes money through its electronic manufacturing services and original equipment manufacturing solutions. The company's primary revenue streams come from manufacturing and assembling electronic products and components for its clients across diverse industries. By leveraging its expertise in design, engineering, and production, Key Tronic partners with customers to bring their products to market efficiently and cost-effectively. The company also derives income from value-added services such as design support, testing, and supply chain management. Significant partnerships and long-term contracts with major corporations contribute to its earnings, ensuring a steady flow of revenue.

Key Tronic Financial Statement Overview

Summary

Key Tronic is facing financial difficulties with declining revenues and negative profitability, as seen in the income statement. The balance sheet shows moderate leverage, which offers some stability, and positive free cash flow growth provides a potential turnaround opportunity despite current losses.

Income Statement

Key Tronic's income statement reflects a challenging period with declining revenues and negative net income in the TTM period. The gross profit margin stands at 7.91%, while the net profit margin is negative at -1.30%, indicating profitability issues. Revenue has decreased from previous periods, showing a -13.48% growth rate from the last annual report. The EBIT margin of 0.61% and EBITDA margin of 1.79% show weak operational performance.

Balance Sheet

The balance sheet indicates moderate financial leverage with a debt-to-equity ratio of 1.01. The company maintains a reasonable equity ratio of 36.40%, providing some buffer against liabilities. However, return on equity is negative at -5.33%, highlighting challenges in generating returns for shareholders.

Cash Flow

Cash flow analysis shows improvement in free cash flow, with a growth rate of 44.97% from the previous annual report. The operating cash flow to net income ratio is -2.79, indicating operational cash flow challenges, though the free cash flow to net income ratio of -2.23 suggests some level of cash flow resilience despite losses.

Breakdown	TTM	Jun 2024	Sep 2023	Sep 2022	Sep 2021	Jun 2020
Income Statement
Total Revenue	490.62M	566.94M	588.13M	531.82M	518.70M	449.48M
Gross Profit	38.79M	39.88M	47.47M	43.21M	42.04M	35.25M
EBITDA	8.78M	17.89M	21.56M	16.36M	16.38M	12.42M
Net Income	-6.38M	-2.79M	5.16M	3.38M	4.34M	4.76M
Balance Sheet
Total Assets	328.56M	355.34M	418.27M	406.92M	361.85M	304.86M
Cash, Cash Equivalents and Short-Term Investments	2.47M	4.75M	3.60M	1.71M	3.47M	553.00K
Total Debt	121.25M	129.82M	135.70M	119.72M	111.84M	83.48M
Total Liabilities	208.96M	231.35M	287.66M	282.05M	238.14M	189.30M
Stockholders Equity	119.59M	123.99M	130.62M	124.88M	123.70M	115.56M
Cash Flow
Free Cash Flow	14.23M	9.82M	-21.08M	-11.72M	-25.65M	-39.63M
Operating Cash Flow	17.81M	13.78M	-11.31M	-4.91M	-15.05M	-31.00M
Investing Cash Flow	-4.09M	-2.11M	-4.53M	-8.05M	-10.60M	-3.58M
Financing Cash Flow	-16.50M	-10.52M	17.74M	11.19M	28.57M	34.53M

Key Tronic Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTCC, the sentiment is Positive. The current price of 3.61 is above the 20-day moving average (MA) of 2.96, above the 50-day MA of 2.95, and above the 200-day MA of 3.23, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 72.50 is Negative, neither overbought nor oversold. The STOCH value of 91.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KTCC.

Key Tronic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$36.69B	12.42	-10.20%	1.85%	8.50%	-7.32%
TACT	60 Neutral	$46.63M	―	-24.73%	―	-9.09%	-1586.89%
OSS	60 Neutral	$122.12M	―	-44.58%	―	4.65%	-79.75%
KTCC	52 Neutral	$36.70M	―	-6.90%	―	-16.49%	-198.42%
SCKT	44 Neutral	$8.04M	―	-16.13%	―	-5.39%	-54.90%
EBON	41 Neutral	$28.07M	―	-7.04%	―	154.52%	47.31%
UAVS	39 Underperform	$63.30M	―	-164.37%	―	1.90%	93.50%

Key Tronic Corporate Events

Key Tronic Secures New Credit Facilities for Growth

Key Tronic Corporation has entered into a new $115 million asset-based senior secured revolving credit facility and a $28 million term loan, both maturing on December 3, 2029. These moves replace their prior credit agreements, allowing the company to settle past debts and support ongoing business needs. The new loans, led by BMO Bank and Callodine Commercial Finance, offer competitive interest rates and are secured by the company’s assets, ensuring robust financial management and growth opportunities.

Key Tronic Shareholders Approve 2024 Incentive Plan

Key Tronic Corporation’s shareholders have approved the 2024 Incentive Plan, previously backed by the board, during the Annual Meeting on November 25, 2024. This plan aims to drive corporate growth and align shareholder interests, enhancing the company’s competitive edge in the financial market landscape.