📊 KAI Key Takeaways
Is Kadant Inc. (KAI) a Good Investment?
Kadant demonstrates exceptional financial health with fortress-like balance sheet (0.38x debt/equity, 2.38x current ratio) and robust cash generation (154.3M FCF, 14.7% FCF margin), but faces material headwinds with flat revenue growth (-0.1% YoY), declining profitability (-1.7% net income, -8.8% EPS), and unusually low gross margins (7.1%) suggesting operational or competitive pressure.
Kadant exhibits strong profitability and cash generation with ~15% operating margin and robust free cash flow, supported by a healthy liquidity profile and moderate leverage with excellent interest coverage. Despite flat revenue and a decline in EPS, cash conversion exceeds net income and the balance sheet provides flexibility to navigate industrial cyclicality and invest in growth.
Why Buy Kadant Inc. Stock? KAI Key Strengths
- Outstanding cash flow generation with 154.3M free cash flow and 14.7% FCF margin
- Conservative capital structure with 0.38x debt/equity ratio and fortress cash position
- Exceptional liquidity and safety metrics: 2.38x current ratio, 1.47x quick ratio, 33.7x interest coverage
- Strong operating margins of 14.9% demonstrate reasonable operational efficiency despite margin compression
- Solid operating and net margins with excellent interest coverage
- Strong free cash flow generation and cash conversion
- Healthy liquidity and moderate leverage (current ratio 2.38x, D/E 0.38x)
KAI Stock Risks: Kadant Inc. Investment Risks
- Revenue stagnation at -0.1% YoY growth with no visible expansion trajectory
- Declining profitability: net income down 1.7% and diluted EPS down 8.8% YoY
- Critically low gross margin of 7.1% suggests structural cost or competitive pressures in product mix
- Declining EPS despite strong FCF indicates potential capital allocation challenges or shareholder dilution
- Flat revenue and declining EPS indicate growth softness
- Cyclical end-market exposure could pressure orders and volumes
- Potential margin compression or working-capital volatility impacting cash flow
Key Metrics to Watch
- Revenue growth inflection points and organic vs. inorganic growth breakdown
- Gross margin recovery trajectory and product mix normalization
- Free cash flow conversion consistency and capital allocation (dividends, buybacks, debt reduction)
- Revenue growth (YoY)
- Operating margin
Kadant Inc. (KAI) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.38x current ratio provides a solid financial cushion.
KAI Profit Margin, ROE & Profitability Analysis
KAI vs Materials Sector: How Kadant Inc. Compares
How Kadant Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Kadant Inc. Stock Overvalued? KAI Valuation Analysis 2026
Based on fundamental analysis, Kadant Inc. has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Kadant Inc. Balance Sheet: KAI Debt, Cash & Liquidity
KAI Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Kadant Inc.'s revenue has grown significantly by 34% over the 5-year period, indicating strong business expansion. The most recent EPS of $9.90 reflects profitable operations.
KAI Revenue Growth, EPS Growth & YoY Performance
KAI Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $271.6M | $27.7M | $2.35 |
| Q2 2025 | $255.3M | $26.2M | $2.22 |
| Q1 2025 | $239.2M | $24.1M | $2.04 |
| Q3 2024 | $244.2M | $30.9M | $2.63 |
| Q2 2024 | $245.1M | $29.7M | $2.54 |
| Q1 2024 | $229.8M | $24.7M | $2.10 |
| Q3 2023 | $224.5M | $27.5M | $2.35 |
| Q2 2023 | $221.6M | $26.2M | $2.24 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Kadant Inc. Dividends, Buybacks & Capital Allocation
KAI SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Kadant Inc. (CIK: 0000886346)
📋 Recent SEC Filings
| Date | Form | Document | Action |
|---|---|---|---|
| Apr 6, 2026 | 4 | xslF345X06/wk-form4_1775478978.xml | View → |
| Apr 6, 2026 | 4 | xslF345X06/wk-form4_1775478895.xml | View → |
| Apr 6, 2026 | 4 | xslF345X06/wk-form4_1775478804.xml | View → |
| Apr 6, 2026 | 4 | xslF345X06/wk-form4_1775478727.xml | View → |
| Apr 6, 2026 | 4 | xslF345X06/wk-form4_1775478643.xml | View → |
❓ Frequently Asked Questions about KAI
What is the AI rating for KAI?
Kadant Inc. (KAI) has a Combined AI Rating of BUY from Claude (HOLD) and ChatGPT (BUY) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are KAI's key strengths?
Claude: Outstanding cash flow generation with 154.3M free cash flow and 14.7% FCF margin. Conservative capital structure with 0.38x debt/equity ratio and fortress cash position. ChatGPT: Solid operating and net margins with excellent interest coverage. Strong free cash flow generation and cash conversion.
What are the risks of investing in KAI?
Claude: Revenue stagnation at -0.1% YoY growth with no visible expansion trajectory. Declining profitability: net income down 1.7% and diluted EPS down 8.8% YoY. ChatGPT: Flat revenue and declining EPS indicate growth softness. Cyclical end-market exposure could pressure orders and volumes.
What is KAI's revenue and growth?
Kadant Inc. reported revenue of $1.1B.
Does KAI pay dividends?
Kadant Inc. pays dividends, with $15.8M distributed to shareholders in the trailing twelve months.
Where can I find KAI SEC filings?
Official SEC filings for Kadant Inc. (CIK: 0000886346) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KAI's EPS?
Kadant Inc. has a diluted EPS of $8.65.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is KAI a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Kadant Inc. has a BUY rating with 70% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is KAI stock overvalued or undervalued?
Valuation metrics for KAI: ROE of 10.4% (sector avg: 14%), net margin of 9.7% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy KAI stock in 2026?
Our dual AI analysis gives Kadant Inc. a combined BUY rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is KAI's free cash flow?
Kadant Inc.'s operating cash flow is $171.3M, with capital expenditures of $17.0M. FCF margin is 14.7%.
How does KAI compare to other Materials stocks?
Vs Materials sector averages: Net margin 9.7% (avg: 10%), ROE 10.4% (avg: 14%), current ratio 2.38 (avg: 1.6).