K-Bro Linen Inc. (TSE:KBL)
TSX:KBL
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K-Bro Linen
(TSX:KBL)
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Rating:64Neutral
Price Target:
C$37.00
▲(6.63% Upside)
Action:DowngradedDate:03/21/26
The score is driven primarily by solid financial performance and cash flow strength, supported by constructive earnings-call commentary around growth and acquisition integration. Offsetting these positives are elevated balance-sheet risk from materially higher debt and a weaker technical setup with below-average momentum.
Positive Factors
Recurring contracted revenue from healthcare & hospitality
K-Bro's core business is contracted linen processing for hospitals and hotels, creating recurring service revenue tied to essential, high-frequency needs. This reduces demand volatility, supports predictable cash flows, and underpins durable customer retention and pricing leverage over the medium term.
Negative Factors
Sharply higher leverage
Debt almost doubled year-over-year, elevating balance-sheet risk and reducing financial flexibility. Higher leverage increases interest and refinancing sensitivity, which can constrain capital allocation and pressurize free cash flow if operating performance weakens or interest costs rise despite current undrawn facility capacity.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring contracted revenue from healthcare & hospitality
K-Bro's core business is contracted linen processing for hospitals and hotels, creating recurring service revenue tied to essential, high-frequency needs. This reduces demand volatility, supports predictable cash flows, and underpins durable customer retention and pricing leverage over the medium term.
Read all positive factors
K-Bro Linen (KBL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$448.99M
Dividend Yield3.43%
Average Volume (3M)16.47K
Price to Earnings (P/E)23.1
Beta (1Y)0.47
Revenue Growth26.29%
EPS Growth-6.47%
CountryCA
Employees3,240
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.55
Shares Outstanding12,990,517
10 Day Avg. Volume14,670
30 Day Avg. Volume16,473
Financial Highlights & Ratios
PEG Ratio-1.58
Price to Book (P/B)1.52
Price to Sales (P/S)0.82
P/FCF Ratio8.71
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$50.00Price Target Upside44.09% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.65
Revenue Forecast (FY)C$586.64M
K-Bro Linen Business Overview & Revenue Model
Company Description
K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare institutions, hotels, and other commercial organizations in Canada and the United Kingdom. Its services include processing, management, and distrib...
How the Company Makes Money
KBL makes money by charging commercial customers recurring service fees for the collection, laundering, processing, and delivery of linen and other reusable textiles. Its core revenue stream is contracted linen processing and management services, ...
K-Bro Linen Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The earnings call highlights K-Bro's strong revenue growth and successful integration of the Stellar Mayan acquisition, which has significantly expanded its market presence in the U.K. However, the company faced challenges with decreased EBITDA margins and increased costs due to the acquisition's cost structure. Overall, the positive growth metrics and strategic positioning outweigh the cost challenges.Positive Updates
Record Revenue and Growth
K-Bro Linen Systems reported record results for Q3 2025 with revenue of $156 million and adjusted EBITDA of $33.5 million, marking the sixth consecutive quarter of record results. Consolidated revenue increased by 49% compared to Q3 2024.
Negative Updates
Decreased EBITDA Margins
Adjusted EBITDA margin decreased to 21.5% in 2025 from 22% in 2024. This decrease is due to the lower Stellar Mayan margin profile.
Read all updates
Q3-2025 Updates
Positive
Negative
Record Revenue and Growth
K-Bro Linen Systems reported record results for Q3 2025 with revenue of $156 million and adjusted EBITDA of $33.5 million, marking the sixth consecutive quarter of record results. Consolidated revenue increased by 49% compared to Q3 2024.
Read all positive updates
Company Guidance
During the K-Bro Linen Systems, Inc. Third Quarter 2025 Results Conference Call, CEO Linda McCurdy highlighted the company's record-breaking Q3 results, with revenue reaching $156 million and adjusted EBITDA at $33.5 million. These results represent a 49% increase in consolidated revenue compared to the same quarter in 2024, driven by a 67% rise in healthcare revenue and a 34% increase in hospitality revenue. The Stellar Mayan acquisition played a significant role, contributing to a 49.3% overall revenue increase and establishing a balanced revenue split between Canada and the U.K. The Canadian division saw an adjusted EBITDA margin rise to 22.8% due to labor efficiencies and the elimination of the Canadian carbon tax, while the U.K. division experienced a margin decrease to 20.3%, attributed to the Stellar Mayan margin profile. Net earnings grew by 8.9% to $8.9 million. Importantly, K-Bro reported a strong balance sheet with a net working capital of $95.7 million and a debt-to-EBITDA ratio of 2.7x, supported by substantial undrawn capacity on their credit facility.K-Bro Linen Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
48
Neutral
Cash Flow
76
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 506.78M | 373.61M | 320.88M | 276.62M | 223.99M |
| Gross Profit | 97.67M | 323.57M | 114.48M | 234.35M | 186.99M |
| EBITDA | 89.44M | 68.76M | 56.45M | 36.49M | 42.79M |
| Net Income | 17.99M | 18.71M | 17.61M | 3.91M | 8.69M |
Balance Sheet | |||||
| Total Assets | 704.44M | 438.15M | 364.72M | 325.76M | 332.52M |
| Cash, Cash Equivalents and Short-Term Investments | 23.36M | 9.42M | 5.86M | 2.64M | 1.11M |
| Total Debt | 320.37M | 178.91M | 123.55M | 98.82M | 94.91M |
| Total Liabilities | 430.60M | 248.74M | 190.28M | 149.22M | 146.12M |
| Stockholders Equity | 273.85M | 189.41M | 174.43M | 176.54M | 186.40M |
Cash Flow | |||||
| Free Cash Flow | 47.67M | 30.62M | 29.02M | 14.67M | 21.38M |
| Operating Cash Flow | 62.71M | 49.95M | 41.01M | 26.13M | 31.88M |
| Investing Cash Flow | -208.16M | -73.24M | -34.26M | -11.43M | -10.49M |
| Financing Cash Flow | 159.41M | 26.23M | -3.72M | -13.11M | -22.69M |
K-Bro Linen Technical Analysis
Negative
34.70
Price Trends
35.05
Negative
34.88
Negative
35.05
Negative
Market Momentum
-0.14
Positive
45.84
Neutral
18.67
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KBL, the sentiment is Negative. The current price of 34.7 is below the 20-day moving average (MA) of 35.01, below the 50-day MA of 35.05, and below the 200-day MA of 35.05, indicating a bearish trend. The MACD of -0.14 indicates Positive momentum. The RSI at 45.84 is Neutral, neither overbought nor oversold. The STOCH value of 18.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KBL.
K-Bro Linen Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | C$475.65M | 16.26 | 7.69% | 8.22% | -2.45% | 44.20% | |
64 Neutral | C$448.99M | 23.08 | 7.09% | 3.43% | 26.29% | -6.47% | |
64 Neutral | C$740.21M | 17.94 | 14.45% | 3.02% | -0.73% | 221.74% | |
64 Neutral | C$475.65M | 16.26 | 7.69% | 8.32% | -2.45% | 44.20% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | C$87.97M | -35.59 | 26.87% | 5.99% | -7.01% | ― |
* Industrials Sector Average
TSE:KBL
K-Bro Linen
34.77
2.83
8.86%
TSE:DCM
Data Commun Management
1.60
0.04
2.56%
TSE:DXT
Dexterra Group
11.86
4.86
69.38%
TSE:TCL.A
Transcontinental
5.52
3.24
142.00%
TSE:TCL.B
Transcontinental Inc. Class B
7.00
3.81
119.50%
K-Bro Linen Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
K-Bro Linen Posts Record 2025 Results and Expands UK Footprint With Stellar Mayan Deal
Positive
Mar 19, 2026
K-Bro Linen reported a 35.7% jump in 2025 revenue to $506.8 million, driven by strong growth in both healthcare and hospitality segments, and delivered its seventh consecutive quarter of record results. Adjusted EBITDA rose 36.9% to $98.7 million ...
Business Operations and StrategyFinancial Disclosures
K-Bro Linen Sets March Date to Unveil Q4 2025 Results
Neutral
Feb 25, 2026
K-Bro Linen Inc. will release its fourth-quarter 2025 financial results after markets close on March 19, 2026, and will discuss the numbers on a conference call and webcast the following morning, led by President and CEO Linda McCurdy and CFO Kris...
Dividends
K-Bro Linen Declares February 2026 Monthly Dividend
Positive
Feb 16, 2026
K-Bro Linen Inc., a major commercial laundry and linen services provider in Canada and the U.K., serves healthcare, hospitality and other commercial customers through a network of facilities under brands including K-Bro Linen Systems, Buanderie HM...
Business Operations and StrategyDividends
K-Bro Linen Declares January 2026 Monthly Dividend
Positive
Jan 15, 2026
K-Bro Linen Inc. has declared a cash dividend of 10 cents per common share for the period from January 1 to 31, 2026, payable on February 13, 2026 to shareholders of record as of January 31, 2026. The dividend, designated as an eligible dividend u...
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.