Karat Packaging Inc.
Karat Packaging Inc. Fundamental Analysis
Karat Packaging Inc. (KRT) shows moderate financial fundamentals with a PE ratio of 17.66, profit margin of 6.73%, and ROE of 20.54%. The company generates $0.5B in annual revenue with moderate year-over-year growth of 4.19%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 57.6/100 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 KRT's fundamental strength across five key dimensions:
Efficiency Score
ExcellentKRT demonstrates superior asset utilization.
Valuation Score
ModerateKRT shows balanced valuation metrics.
Growth Score
WeakKRT faces weak or negative growth trends.
Financial Health Score
ExcellentKRT maintains a strong and stable balance sheet.
Profitability Score
ModerateKRT maintains healthy but balanced margins.
Key Financial Metrics
Is KRT Expensive or Cheap?
P/E Ratio
KRT trades at 17.66 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, KRT's PEG of 4.44 indicates potential overvaluation.
Price to Book
The market values Karat Packaging Inc. at 3.72 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 8.65 times EBITDA. This is generally considered low.
How Well Does KRT Make Money?
Net Profit Margin
For every $100 in sales, Karat Packaging Inc. keeps $6.73 as profit after all expenses.
Operating Margin
Core operations generate 8.79 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $20.54 in profit for every $100 of shareholder equity.
ROA
Karat Packaging Inc. generates $10.94 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Karat Packaging Inc. generates limited operating cash flow of $33.92M, signaling weaker underlying cash strength.
Free Cash Flow
Karat Packaging Inc. produces free cash flow of $29.04M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $1.45 in free cash annually.
FCF Yield
KRT converts 5.19% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
17.66
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.44
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.72
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.19
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.38
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.22
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.21
vs 25 benchmark
ROA
Return on assets percentage
0.11
vs 25 benchmark
ROCE
Return on capital employed
0.19
vs 25 benchmark
How KRT Stacks Against Its Sector Peers
| Metric | KRT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 17.66 | 23.83 | Better (Cheaper) |
| ROE | 20.54% | 1168.00% | Weak |
| Net Margin | 6.73% | -2376.00% (disorted) | Weak |
| Debt/Equity | 0.38 | 0.74 | Strong (Low Leverage) |
| Current Ratio | 2.22 | 2.57 | Strong Liquidity |
| ROA | 10.94% | -34556.00% (disorted) | Strong |
KRT outperforms its industry in 4 out of 6 key metrics, particularly excelling in ROA, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Karat Packaging Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
42.70%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
1220.39%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
113969.69%
Industry Style: Cyclical, Growth, Discretionary
High Growth