K-Bro Linen (KBL) AI Stock Analysis

• Market Cap: C$448.79M
• Dividend Yield: 3.44%
• Average Volume (3M): 16.47K
• Price to Earnings (P/E): 21.0
• Beta (1Y): 0.42
• Revenue Growth: 26.29%
• EPS Growth: -6.47%
• Country: CA
• Employees: 3,240
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.93
• Shares Outstanding: 12,859,823
• 10 Day Avg. Volume: 14,670
• 30 Day Avg. Volume: 16,473
• PEG Ratio: 2.69
• Price to Book (P/B): 2.10
• Price to Sales (P/S): 1.06
• P/FCF Ratio: 12.97
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$50.00
• Price Target Upside: 43.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: C$39.00 ▲(11.75% Upside)

K-Bro Linen's overall stock score reflects strong financial performance and positive earnings call highlights, particularly the successful integration of the Stellar Mayan acquisition. However, technical indicators suggest a neutral outlook, and valuation concerns due to a high P/E ratio slightly offset the positives. The company's strategic positioning and growth potential in the U.K. market are significant strengths.

Positive Factors

Revenue Growth

The significant revenue growth, driven by the Stellar Mayan acquisition, indicates strong demand and successful market expansion, particularly in the U.K., enhancing long-term revenue stability.

Market Expansion

The acquisition of Stellar Mayan has expanded K-Bro's footprint in the U.K., diversifying revenue sources and strengthening its competitive position in the commercial laundry sector.

Cash Flow Generation

Strong cash flow growth supports future investments and debt servicing, ensuring financial flexibility and stability, crucial for long-term growth.

Negative Factors

Increased Leverage

Higher leverage could strain financial flexibility and increase risk, necessitating careful debt management to maintain financial health and support growth.

Decreased EBITDA Margins

The decline in EBITDA margins due to the acquisition's cost structure may impact profitability, requiring efficiency improvements to sustain margins.

Increased Costs

Rising costs, primarily from the acquisition, could pressure net earnings, necessitating cost control measures to maintain profitability.

K-Bro Linen Business Overview & Revenue Model

Company Description

K-Bro Linen (KBL) is a leading provider of laundry and linen services in Canada, specializing in the hospitality and healthcare sectors. The company operates multiple state-of-the-art facilities across the country, offering a range of services including the laundering of linens, uniforms, and other textiles. KBL is committed to sustainability and employs advanced technologies to ensure high-quality service while minimizing environmental impact.

How the Company Makes Money

K-Bro Linen generates revenue primarily through contracts with clients in the healthcare and hospitality industries. The company charges fees for its laundry services, which can include per-item pricing or flat-rate contracts based on volume. Key revenue streams come from the consistent demand for clean linens and uniforms from hospitals, hotels, and other institutions. Additionally, KBL may engage in significant partnerships with major healthcare providers or hotel chains, which can lead to long-term contracts that stabilize revenue. The company's focus on operational efficiency and sustainability also helps reduce costs and enhance profitability.

K-Bro Linen Financial Statement Overview

Summary

K-Bro Linen demonstrates solid financial health with consistent revenue growth and strong gross margins. The balance sheet reflects a balanced leverage strategy, while cash flow generation is improving. Profitability margins have seen slight pressure, but overall financial stability remains strong.

Income Statement

K-Bro Linen shows a consistent revenue growth trend with a 5.1% increase in TTM. The gross profit margin is strong at 70.6%, indicating efficient cost management. However, the net profit margin has slightly decreased to 4.6% in TTM, suggesting some pressure on net earnings. EBIT and EBITDA margins are stable, reflecting solid operational performance.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.91, indicating a balanced approach to leveraging. Return on equity is healthy at 9.5%, showing effective use of shareholder funds. The equity ratio is not explicitly calculated, but the balance sheet suggests a stable financial position with adequate equity backing.

Cash Flow

Free cash flow growth is positive at 5.95%, indicating improved cash generation. The operating cash flow to net income ratio is robust at 0.86, showing strong cash conversion. However, the free cash flow to net income ratio at 0.63 suggests room for improvement in cash flow efficiency relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	455.44M	373.61M	320.88M	276.62M	223.99M	196.59M
Gross Profit	392.18M	323.57M	114.48M	234.35M	186.99M	164.82M
EBITDA	83.56M	68.76M	56.45M	36.49M	42.79M	38.24M
Net Income	19.34M	18.71M	17.61M	3.91M	8.69M	3.78M
Balance Sheet
Total Assets	718.56M	438.15M	364.72M	325.76M	332.52M	323.81M
Cash, Cash Equivalents and Short-Term Investments	26.01M	9.42M	5.86M	2.64M	1.11M	2.42M
Total Debt	326.66M	178.91M	123.55M	98.82M	94.91M	86.66M
Total Liabilities	440.76M	248.74M	190.28M	149.22M	146.12M	134.31M
Stockholders Equity	277.80M	189.41M	174.43M	176.54M	186.40M	189.50M
Cash Flow
Free Cash Flow	37.23M	30.62M	29.02M	14.67M	21.38M	37.98M
Operating Cash Flow	52.02M	49.95M	41.01M	26.13M	31.88M	42.40M
Investing Cash Flow	-206.63M	-73.24M	-34.26M	-11.43M	-10.49M	-4.41M
Financing Cash Flow	159.59M	26.23M	-3.72M	-13.11M	-22.69M	-40.83M

K-Bro Linen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 34.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 34.9 is below the 20-day moving average (MA) of 35.02, below the 50-day MA of 36.01, and below the 200-day MA of 34.97, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 43.91 is Neutral, neither overbought nor oversold. The STOCH value of 46.76 is Neutral, 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCL.A	74 Outperform	C$1.92B	11.27	8.95%	8.36%	-2.45%	44.20%
DXT	72 Outperform	C$734.76M	18.46	14.38%	3.02%	-0.73%	221.74%
KBL	71 Outperform	C$448.79M	20.99	8.30%	3.44%	26.29%	-6.47%
TCL.B	70 Neutral	C$1.92B	11.22	8.95%	8.27%	-2.45%	44.20%
GDI	65 Neutral	C$664.71M	16.19	8.55%	―	-2.83%	179.03%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
DCM	54 Neutral	C$95.05M	9.04	26.87%	5.78%	-7.01%	―

K-Bro Linen Corporate Events

K-Bro Linen Strengthens Board with Rona Ambrose Appointment

K-Bro Linen Inc. has appointed the Honourable Rona Ambrose to its Board of Directors, effective November 5, 2025. Ms. Ambrose, who brings extensive experience from her roles in both the corporate and political sectors, is expected to strengthen K-Bro’s Board with her leadership and insights. Her appointment is seen as a strategic move to support K-Bro’s growth strategy, leveraging her expertise in public policy and investment to enhance the company’s industry positioning.

K-Bro Linen to Announce Q3 2025 Financial Results

K-Bro Linen Inc. announced it will release its Q3 2025 financial results on November 12, 2025, followed by a conference call and webcast on November 13, 2025. The call will feature remarks from the company’s President and CEO, Linda McCurdy, and CFO, Kristie Plaquin, and will be open to analysts and institutional investors for questions. This announcement is part of K-Bro’s ongoing efforts to maintain transparency with stakeholders and provide insights into its financial performance.

K-Bro Linen Declares October 2025 Dividend

K-Bro Linen Inc. has announced a dividend of 10.00 cents CDN per common share for October 2025, to be paid on November 14, 2025, to shareholders of record on October 31, 2025. This announcement reflects K-Bro’s ongoing commitment to returning value to its shareholders and may positively influence investor confidence in the company’s financial stability and market positioning.

K-Bro Linen Declares September 2025 Dividend

K-Bro Linen Inc. has declared a dividend of 10.00 cents CDN per common share for September 2025, payable on October 15, 2025, to shareholders of record on September 30, 2025. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders and reinforces its stable financial position within the laundry and linen processing industry.