Karat Packaging Inc. (KRT)
Valuation Overview•Is Karat Packaging Inc. Overvalued or Undervalued?
Trading at a relative discount to industry peers, suggesting a specific risk premium is applied.
Moderate quality score of 64/100, reflecting stable operating margins and manageable leverage.
Wall Street forecasts a balanced outlook with consensus price targets near the current price.
Verdict: Solid fundamental quality, though profitability presents a headwind.
Wall Street sentiment is generally neutral alongside robust expected earnings growth. This outlook is strongly supported by highly attractive capital returns, anchored by a strong dividend yield, though free cash flow coverage appears tight.
KRT demonstrates adequate business quality with stable profitability. This is supported by a highly conservative balance sheet featuring strong liquidity and pristine Altman Z safety.
The company exhibits steady, low-single-digit revenue growth paired with robust earnings compounding (9.4% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 8.8%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $116.9M | +10.7% | +3.4% | +9.6% | — | |
| EBITDA | $13.9M | — | +12.1% | — | — | |
| Net Income | $6.7M | +5.0% | +10.0% | — | — | |
| EPS (Diluted) | $0.34 | +4.7% | +9.4% | +6.7% | — | |
| Free Cash Flow | $6.3M | -33.3% | +25.8% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 35.7% | 37.8% | 34.8% | 31.8% |
| Operating Margin | 8.8% | 9.4% | 8.3% | 6.6% |
| Net Margin | 6.6% | 7.3% | 6.6% | 4.8% |
| FCF Margin | 5.9% | 9.2% | 6.0% | -1.4% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.32 | $0.34 | +6.3% | ||
| Q1'26 | $0.28 | $0.34 | +23.3% | ||
| Q4'25 | $0.39 | $0.37 | -5.1% | ||
| Q3'25 | $0.60 | $0.57 | -5.0% | ||
| Q2'25 | $0.31 | $0.33 | +6.5% | ||
| Q1'25 | $0.43 | $0.29 | -32.6% | ||
| Q4'24 | $0.52 | $0.47 | -9.6% | ||
| Q3'24 | $0.60 | $0.49 | -18.3% |
Total return is +19.9% (1Y), lagging the benchmark by -5.0%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +39.2% | +29.9% | — |
| 1Y | +19.9% | -5.0% | +6.7% |
| 3YCAGR | +26.0% | +5.3% | +28.1% |
| 5YCAGR | +12.4% | -1.6% | +28.2% |
| 10YCAGR | +6.8% | -7.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Karat Packaging Inc. (KRT) valuation, health, and returns.
Based on peer relative multiples, Karat Packaging Inc. appears Cheap versus peers compared to industry peers.
Karat Packaging Inc. has multiple valuation anchors: Peer Relative Fair Value: $44.65 | Wall Street Analyst Target: $31.50 (implying +4.1% upside). A convergence of these signals offers higher conviction.
Karat Packaging Inc. displays good financial health with a composite quality score of 64/100, supported by a Altman Z-Score of 5.3 (safe zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 15.4%.
Karat Packaging Inc. pays a 5.9% dividend yield, covered by a 115% payout ratio with 3 years of growth, supplemented by a 0.5% buyback yield.
Karat Packaging Inc.'s current growth trajectory is Accelerating. The company achieved +10.7% 1Y revenue growth and +4.7% 1Y EPS growth, compared to its 3Y revenue CAGR of +3.4%.
Wall Street consensus is Buy based on 6 analysts, beating EPS expectations in 42% of recent quarters with a 2-quarter streak. The consensus price target represents a +4.1% change from current levels.
Investment risks for Karat Packaging Inc. include: -28.1% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of 0.68x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.