📊 KRT Key Takeaways
Is Karat Packaging Inc. (KRT) a Good Investment?
Karat Packaging demonstrates strong financial fundamentals with excellent balance sheet strength (0.24x D/E ratio, 79.0x interest coverage) and healthy revenue growth of 10.7% YoY. However, net income declined 3.6% despite top-line expansion, indicating margin compression that requires monitoring. The company generates substantial free cash flow ($33.1M, 7.1% margin) and maintains conservative leverage, positioning it well despite modest profitability.
Karat Packaging shows double-digit revenue growth with healthy margins, strong ROE/ROA, low leverage, and excellent interest coverage, translating into solid free cash flow. Despite a slight YoY dip in net income, cash generation and a strong balance sheet indicate resilient fundamentals and capacity to reinvest or return capital.
Why Buy Karat Packaging Inc. Stock? KRT Key Strengths
- Exceptional financial health with 0.24x debt-to-equity ratio and 79.0x interest coverage ratio
- Solid revenue growth momentum at 10.7% YoY with strong free cash flow generation of $33.1M
- High return on equity of 21.1% and healthy liquidity with 2.30x current ratio demonstrates capital efficiency
- Double-digit revenue growth with resilient 36.8% gross margin
- Strong profitability and returns (8.9% operating margin, 21.1% ROE) on modest leverage
- Robust liquidity and FCF (7.1% margin) with minimal capex
KRT Stock Risks: Karat Packaging Inc. Investment Risks
- Net income declined 3.6% YoY despite 10.7% revenue growth indicating margin compression and potential operational stress
- Low net margin of 6.7% and operating margin of 8.9% provide limited cushion against cost pressures or economic downturns
- Cyclical plastics industry exposure to volatile input commodity costs and competitive pricing pressures
- Margin pressure from input cost volatility and competitive pricing (net income down YoY)
- Working capital/inventory intensity could weigh on cash conversion
- Regulatory and ESG headwinds for single-use plastics impacting demand or mix
Key Metrics to Watch
- Gross margin trend - critical indicator of pricing power versus input cost inflation
- Operating margin development - reveals operational efficiency and cost management effectiveness
- Free cash flow conversion ratio - ensures sustainability of cash generation amid margin pressures
- Operating margin
- Free cash flow conversion (OCF/Net income)
Karat Packaging Inc. (KRT) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Strong liquidity with a 2.30x current ratio provides a solid financial cushion.
KRT Profit Margin, ROE & Profitability Analysis
KRT vs Materials Sector: How Karat Packaging Inc. Compares
How Karat Packaging Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Karat Packaging Inc. Stock Overvalued? KRT Valuation Analysis 2026
Based on fundamental analysis, Karat Packaging Inc. appears fundamentally strong 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.
Karat Packaging Inc. Balance Sheet: KRT Debt, Cash & Liquidity
KRT Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Karat Packaging Inc.'s revenue has grown significantly by 28% over the 5-year period, indicating strong business expansion. The most recent EPS of $1.49 reflects profitable operations.
KRT Revenue Growth, EPS Growth & YoY Performance
KRT Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $112.8M | $7.3M | $0.36 |
| Q2 2025 | $112.6M | $9.1M | $0.45 |
| Q1 2025 | $95.6M | $6.2M | $0.31 |
| Q3 2024 | $105.5M | $9.1M | $0.45 |
| Q2 2024 | $108.7M | $9.1M | $0.45 |
| Q1 2024 | $95.6M | $6.2M | $0.31 |
| Q3 2023 | $105.5M | $6.1M | $0.31 |
| Q2 2023 | $108.7M | $6.3M | $0.32 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Karat Packaging Inc. Dividends, Buybacks & Capital Allocation
KRT SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Karat Packaging Inc. (CIK: 0001758021)
📋 Recent SEC Filings
❓ Frequently Asked Questions about KRT
What is the AI rating for KRT?
Karat Packaging Inc. (KRT) has a Combined AI Rating of BUY from Claude (BUY) and ChatGPT (BUY) with 76% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are KRT's key strengths?
Claude: Exceptional financial health with 0.24x debt-to-equity ratio and 79.0x interest coverage ratio. Solid revenue growth momentum at 10.7% YoY with strong free cash flow generation of $33.1M. ChatGPT: Double-digit revenue growth with resilient 36.8% gross margin. Strong profitability and returns (8.9% operating margin, 21.1% ROE) on modest leverage.
What are the risks of investing in KRT?
Claude: Net income declined 3.6% YoY despite 10.7% revenue growth indicating margin compression and potential operational stress. Low net margin of 6.7% and operating margin of 8.9% provide limited cushion against cost pressures or economic downturns. ChatGPT: Margin pressure from input cost volatility and competitive pricing (net income down YoY). Working capital/inventory intensity could weigh on cash conversion.
What is KRT's revenue and growth?
Karat Packaging Inc. reported revenue of $467.7M.
Does KRT pay dividends?
Karat Packaging Inc. pays dividends, with $36.1M distributed to shareholders in the trailing twelve months.
Where can I find KRT SEC filings?
Official SEC filings for Karat Packaging Inc. (CIK: 0001758021) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is KRT's EPS?
Karat Packaging Inc. has a diluted EPS of $1.56.
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 KRT a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Karat Packaging Inc. has a BUY rating with 76% confidence. The AI analysis suggests favorable fundamentals based on SEC filings. This is not investment advice.
Is KRT stock overvalued or undervalued?
Valuation metrics for KRT: ROE of 21.1% (sector avg: 14%), net margin of 6.7% (sector avg: 10%). Higher ROE suggests strong returns relative to peers.
Should I buy KRT stock in 2026?
Our dual AI analysis gives Karat Packaging 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 KRT's free cash flow?
Karat Packaging Inc.'s operating cash flow is $33.8M, with capital expenditures of $756.0K. FCF margin is 7.1%.
How does KRT compare to other Materials stocks?
Vs Materials sector averages: Net margin 6.7% (avg: 10%), ROE 21.1% (avg: 14%), current ratio 2.30 (avg: 1.6).