Kadant Inc.
Kadant Inc. Fundamental Analysis
Kadant Inc. (KAI) shows weak financial fundamentals with a PE ratio of 39.78, profit margin of 9.69%, and ROE of 11.26%. The company generates $1.1B in annual revenue with moderate year-over-year growth of 9.99%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 69.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze KAI's fundamental strength across five key dimensions:
Efficiency Score
WeakKAI struggles to generate sufficient returns from assets.
Valuation Score
ModerateKAI shows balanced valuation metrics.
Growth Score
ModerateKAI shows steady but slowing expansion.
Financial Health Score
ExcellentKAI maintains a strong and stable balance sheet.
Profitability Score
WeakKAI struggles to sustain strong margins.
Key Financial Metrics
Is KAI Expensive or Cheap?
P/E Ratio
KAI trades at 39.78 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, KAI's PEG of -344.86 indicates potential undervaluation.
Price to Book
The market values Kadant Inc. at 4.66 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 18.24 times EBITDA. This signals the market has high growth expectations.
How Well Does KAI Make Money?
Net Profit Margin
For every $100 in sales, Kadant Inc. keeps $9.69 as profit after all expenses.
Operating Margin
Core operations generate 14.95 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.26 in profit for every $100 of shareholder equity.
ROA
Kadant Inc. generates $6.41 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Kadant Inc. produces operating cash flow of $162.45M, showing steady but balanced cash generation.
Free Cash Flow
Kadant Inc. generates strong free cash flow of $145.87M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $12.39 in free cash annually.
FCF Yield
KAI converts 3.62% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.78
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-344.86
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.66
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.85
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.43
vs 25 benchmark
Current Ratio
Current assets to current liabilities
9.15
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.11
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How KAI Stacks Against Its Sector Peers
| Metric | KAI Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.78 | 26.76 | Worse (Expensive) |
| ROE | 11.26% | 1300.00% | Weak |
| Net Margin | 9.69% | -29570.00% (disorted) | Weak |
| Debt/Equity | 0.43 | 0.79 | Strong (Low Leverage) |
| Current Ratio | 9.15 | 10.68 | Strong Liquidity |
| ROA | 6.41% | -1545134.00% (disorted) | Weak |
KAI outperforms its industry in 2 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Kadant Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
43.07%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
105.13%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
52.55%
Industry Style: Cyclical, Value, Infrastructure
High Growth