tiprankstipranks
Trending News
More News >
Key Tronic Corp. (KTCC)
NASDAQ:KTCC
Advertisement

Key Tronic (KTCC) AI Stock Analysis

Compare
82 Followers

Top Page

KTCC

Key Tronic

(NASDAQ:KTCC)

Rating:52Neutral
Price Target:
$3.00
▲(7.91% Upside)
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.

Key Tronic (KTCC) vs. SPDR S&P 500 ETF (SPY)

Key Tronic Business Overview & Revenue Model

Company DescriptionKey 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 MoneyKey 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 Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q3-2025)
|
% Change Since: 14.40%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with notable improvements in gross margins, reduced net loss, and business expansions in the US and Vietnam. However, these positives were countered by significant revenue declines, ongoing challenges with tariffs, and customer hesitancy due to economic uncertainties.
Q3-2025 Updates
Positive Updates
Improvement in Gross Margins
Gross margins increased to 7.7% in Q3 FY2025 from 5.7% in the same period of FY2024, reflecting cost-cutting and headcount reductions.
Reduction in Net Loss
Net loss decreased to $0.6 million in Q3 FY2025 from $2.2 million in the same period of FY2024, showing improvement in financial performance.
Significant Debt Reduction
Total liabilities reduced by $34.3 million, or 14%, from a year ago, indicating strong financial management.
New Business Wins
Secured new programs in telecommunications, pest control, energy storage, medical technology, and temperature-controlled shipping solutions.
Expansion Plans in the US and Vietnam
Investing over $28 million to expand operations in Arkansas and Vietnam, expected to create over 400 new jobs in the next five years.
Negative Updates
Decrease in Revenue
Total revenue for Q3 FY2025 was $112 million, down from $142.4 million in the same period of FY2024, impacted by global economic disruptions and tariff fluctuations.
Operating Margins Remain Negative
Operating margins were negative at 0.4% in Q3 FY2025, unchanged from the same period of FY2024.
Challenges with Tariffs
Significant uncertainties and increased costs due to tariffs on China, Mexico, and Vietnam, impacting production and demand.
Increased Accounts Receivable DSOs
Accounts receivable DSOs increased to 92 days from 85 days a year ago, reflecting slower collections.
Hesitancy in Customer Decision-Making
Notable hesitancy and business paralysis among customers due to economic uncertainties, delaying new projects and impacting growth.
Company Guidance
During the Q3 fiscal year 2025 investor call, Key Tronic reported total revenue of $112 million, a significant decrease from $142.4 million in the same period of fiscal 2024, primarily due to global economic disruptions and tariff fluctuations. Gross margins improved to 7.7% from 5.7% despite operating margins remaining at a negative 0.4%. The company recorded a net loss of $0.6 million or $0.06 per share, an improvement from a $2.2 million loss or $0.21 per share in the previous year. Adjusted net loss was reported at $0.6 million or $0.05 per share, compared to $2.2 million or $0.20 per share previously. Key Tronic achieved reductions in inventory by $16 million (14%) and liabilities by $34.3 million (14%), with an operating cash flow increase to $10.1 million for the first nine months, up from $6.1 million. The company continues to pursue strategic cost-saving initiatives, with CapEx expected between $6 million and $8 million for the full year, focusing on expansions in Arkansas and Vietnam. Despite tariff uncertainties, Key Tronic anticipates growth in U.S. and Vietnam production and remains focused on improving profitability without providing specific revenue or earnings guidance for Q4 fiscal 2025.

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
45
Neutral
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
55
Neutral
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
60
Neutral
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.
BreakdownTTMJun 2024Sep 2023Sep 2022Sep 2021Jun 2020
Income Statement
Total Revenue490.62M566.94M588.13M531.82M518.70M449.48M
Gross Profit38.79M39.88M47.47M43.21M42.04M35.25M
EBITDA8.78M17.89M21.56M16.36M16.38M12.42M
Net Income-6.38M-2.79M5.16M3.38M4.34M4.76M
Balance Sheet
Total Assets328.56M355.34M418.27M406.92M361.85M304.86M
Cash, Cash Equivalents and Short-Term Investments2.47M4.75M3.60M1.71M3.47M553.00K
Total Debt121.25M129.82M135.70M119.72M111.84M83.48M
Total Liabilities208.96M231.35M287.66M282.05M238.14M189.30M
Stockholders Equity119.59M123.99M130.62M124.88M123.70M115.56M
Cash Flow
Free Cash Flow14.23M9.82M-21.08M-11.72M-25.65M-39.63M
Operating Cash Flow17.81M13.78M-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-10.52M17.74M11.19M28.57M34.53M

Key Tronic Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.78
Price Trends
50DMA
2.91
Negative
100DMA
2.75
Positive
200DMA
3.43
Negative
Market Momentum
MACD
-0.04
Positive
RSI
41.90
Neutral
STOCH
40.47
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KTCC, the sentiment is Negative. The current price of 2.78 is below the 20-day moving average (MA) of 2.87, below the 50-day MA of 2.91, and below the 200-day MA of 3.43, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 41.90 is Neutral, neither overbought nor oversold. The STOCH value of 40.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KTCC.

Key Tronic Risk Analysis

Key Tronic disclosed 34 risk factors in its most recent earnings report. Key Tronic 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

Key Tronic Peers Comparison

Overall Rating
UnderperformOutperform
Sector (48)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
60
Neutral
$42.79M-24.73%-9.09%-1586.89%
60
Neutral
$108.53M-44.58%4.65%-79.75%
52
Neutral
$30.13M-5.11%-18.85%-2549.17%
48
Neutral
C$3.32B0.26-6.09%7.64%9.19%-16.12%
44
Neutral
$8.20M-16.13%-5.39%-54.90%
41
Neutral
$25.27M-7.04%154.52%47.31%
40
Underperform
$59.90M-164.37%1.90%93.50%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KTCC
Key Tronic
2.78
-1.58
-36.24%
SCKT
Socket Mobile
1.06
0.02
1.92%
TACT
Transact Technologies
4.25
-0.20
-4.49%
UAVS
AgEagle Aerial Systems
1.92
-22.03
-91.98%
OSS
One Stop Systems
5.65
3.58
172.95%
EBON
Ebang International Holdings
3.89
-2.67
-40.70%

Key Tronic Corporate Events

Private Placements and Financing
Key Tronic Secures New Credit Facilities for Growth
Positive
Dec 5, 2024

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.

Shareholder MeetingsBusiness Operations and Strategy
Key Tronic Shareholders Approve 2024 Incentive Plan
Positive
Dec 2, 2024

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.

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.Date of analysis: Jul 31, 2025