KRT

Karat Packaging

Fundamental data last updated:April 13, 2026

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company profile

SECTOR

Consumer Cyclical

industry

Packaging & Containers

Exchange

Nasdaq

County of HQ

United States

Next Earnings Date

05/14/26

Business Summary

Karat Packaging manufactures and distributes disposable foodservice products, generating cash by supplying essential consumables to restaurants and food distributors. The moat is rooted in scale purchasing, supplier relationships, and distribution density, allowing the company to protect margins even in a commoditized segment. With 20.60% operating margins, it demonstrates pricing power and operational efficiency in a business where logistics execution is everything. Cash flow durability comes from recurring demand for consumables rather than one-off capital goods, creating repeat revenue streams tied to food consumption trends rather than discretionary tech cycles.

 


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VALUATION

P/E

19.1

Market Cap ($M USD)

$594

Forward P/E

13.1

PEG

-

PRICE TO SALES

1.3

PRICE TO BOOK

3.9

EV / EBITDA

11.9

5-Year Average P/E

Free Cash Flow Yield

DCF Value

Graham Number

Price to FCF

EV to FCF

Earnings Yield

FCF Yield

DIVIDEND

Yield

6.00%

Annual Payout

$1.80

Payout Ratio

114.70%

Consecutive Years of Dividend Growth

2

5-Year Dividend Growth Rate

-

Financial Health & Profitability

Earnings Per Share

$1.57

Next Year EPS Growth Estimate

$2.28

Next Year Revenue Growth Estimate

8.00%

Return on Equity (ROE)

20.60%

FREE CASH FLOW

Operating Margin

8.80%

Debt-to-Equity

0.3

Piotroski F-Score

6

Altman Z-Score

4

Return on Invested Capital (ROIC)

16.70%

Current Ratio

2.3

Quick Ratio

Net Debt to EBITDA

Interest Coverage

Gross Profit margin

FCF PER SHARE

REVENUE PER SHARE

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Gainseekers Quantitative Analysis

Summary

At 19.1x earnings and just 13.1x forward earnings, the market is pricing KRT as a no-growth cyclical despite a 16.70% ROIC and a pristine Altman Z-Score of 4. The balance sheet signals low bankruptcy risk, and the compression from trailing P/E to forward P/E implies earnings expansion the market is not fully rewarding. A 1.3x Price/Sales multiple for a company producing 20.60% operating margins is not expensive in absolute terms, especially with a solid Piotroski F-Score of 6. This looks like a financially stable small-cap trading at a muted growth multiple, suggesting modest mispricing to the upside rather than deep distress.

AI Exposure / Tech Reliance

As a Packaging & Containers company within Consumer Cyclical, KRT operates in a physical-goods business that is not directly disrupted by AI but can benefit from automation, logistics optimization, and data-driven inventory management. AI-driven supply chain efficiencies could enhance already strong 20.60% operating margins. The business is more execution-sensitive than tech-disruptable, which provides resilience but limits explosive AI-driven upside.

The Bull Case

A GARP investor buys this because the capital efficiency is real: 16.70% ROIC paired with 8.00% ROE suggests disciplined deployment of capital without excessive leverage, reinforced by a low 8.80% Debt/Equity ratio. The 20.60% operating margin is substantial for a packaging company, and a Piotroski F-Score of 6 indicates fundamentally sound operations without major accounting red flags. The drop from a 19.1 P/E to a 13.1 forward P/E implies earnings growth that is not yet fully capitalized into the stock price. Add a 2.3 current ratio and an Altman Z-Score of 4, and you have a company with liquidity strength and solvency safety trading at just 1.3x sales—an attractive setup for disciplined value investors seeking durable mid-teens capital returns.

The Bear Case

The red flags are subtle but important. PEG Forward is not provided, which removes clarity on growth-adjusted valuation, and forward visibility appears limited given the absence of short interest data. ROE at 8.00% is not impressive relative to the 3.9 Price/Book multiple, suggesting equity is not being leveraged into high shareholder returns. The TTM yield of 0.3 alongside a 6.00% dividend per share figure and a $1.80 payout ratio introduces capital allocation ambiguity, and institutional ownership at $29.50 (as provided) does not signal overwhelming smart-money conviction. This is a steady operator, but not obviously a compounding machine.

Market Sentiment & Smart Money

Short Interest %

2.20%

Analyst Consensus

2.25

Average Analyst Price Target

$29.50

Institutional Ownership %

33.30%

1-Year Beta

0.85

Insider Buying % (6 Mo)

57.90%%

Distance to 52-Week High

91.10%

Distance to 52-Week Low

144.50%

EARNINGS SURPRISE %

50-DAY SMA

200-DAY SMA

⚠️ Financial Disclaimer:
This content is for informational purposes only and is not financial advice. Information may be delayed or inaccurate. We may earn a commission from partner links.