Karat Packaging (NASDAQ:KRT) Shares Gap Down After Earnings Miss

Karat Packaging Inc. (NASDAQ:KRT) gapped down prior to trading on Friday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $51.44, but opened at $42.02. Karat Packaging shares last traded at $38.4970, with a volume of 54,201 shares.

The company reported $0.24 EPS for the quarter, missing analysts’ consensus estimates of $0.41 by ($0.17). The business had revenue of $134.74 million for the quarter, compared to the consensus estimate of $140.33 million. Karat Packaging had a net margin of 10.18% and a return on equity of 30.62%.

Karat Packaging Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Friday, November 27th. Investors of record on Thursday, November 19th will be issued a dividend of $0.47 per share. This represents a $1.88 dividend on an annualized basis and a dividend yield of 4.9%. The ex-dividend date is Thursday, November 19th. Karat Packaging’s dividend payout ratio is currently 75.20%.

Trending Headlines about Karat Packaging

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Karat declared a quarterly dividend of $0.47 per share, payable November 27 to shareholders of record November 19. The annualized dividend is $1.88, equivalent to a reported yield of roughly 3.6%–3.7%. Dividend announcement
• Neutral Sentiment: The company described its pipeline as strengthening and reported solid topline growth, though quarterly revenue still came in below analysts’ forecasts. Third-quarter results
• Neutral Sentiment: Trading in KRT was temporarily paused under a Limit Up-Limit Down (LULD) halt. This is a volatility-related trading pause and, by itself, does not indicate a change in the company’s fundamentals.
• Neutral Sentiment: Sell-side analysts reportedly assigned the stock a “Hold” rating, signaling a wait-and-see stance rather than a clear positive or negative catalyst. Analyst rating
• Negative Sentiment: Third-quarter adjusted EPS was $0.24, below analyst estimates (reported at about $0.41–$0.46) and down from $0.37 a year earlier. Revenue of $134.74 million also missed the $140.33 million consensus. The earnings and sales shortfalls are the main reason for pressure on the stock. Quarterly earnings estimates

Wall Street Analyst Weigh In

Several analysts recently weighed in on KRT shares. Lake Street Capital reiterated a “buy” rating and issued a $60.00 price target on shares of Karat Packaging in a report on Monday, September 14th. Bank of America boosted their price objective on shares of Karat Packaging from $23.00 to $34.00 and gave the company an “underperform” rating in a research report on Tuesday, July 14th. Weiss Ratings upgraded shares of Karat Packaging from a “buy (b-)” rating to a “buy (b)” rating in a report on Wednesday, August 12th. Finally, Wall Street Zen upgraded shares of Karat Packaging from a “hold” rating to a “buy” rating in a report on Saturday, August 15th. Three investment analysts have rated the stock with a Buy rating, two have issued a Hold rating and one has given a Sell rating to the stock. According to MarketBeat, the company presently has an average rating of “Hold” and an average price target of $47.00.

Institutional Trading of Karat Packaging

Large investors have recently bought and sold shares of the company. CWA Asset Management Group LLC raised its position in shares of Karat Packaging by 35.9% in the 3rd quarter. CWA Asset Management Group LLC now owns 185,066 shares of the company’s stock worth $9,725,000 after acquiring an additional 48,906 shares in the last quarter. PDT Partners LLC purchased a new position in shares of Karat Packaging in the 2nd quarter valued at approximately $1,106,000. BlackRock Inc. bought a new stake in shares of Karat Packaging during the second quarter valued at approximately $19,840,000. Inspire Investing LLC boosted its position in shares of Karat Packaging by 199.6% during the third quarter. Inspire Investing LLC now owns 61,286 shares of the company’s stock valued at $3,221,000 after purchasing an additional 40,830 shares in the last quarter. Finally, Bank of New York Mellon Corp purchased a new stake in Karat Packaging in the second quarter worth $5,337,000. 25.20% of the stock is owned by institutional investors.

Karat Packaging Stock Performance

The company has a market capitalization of $761.30 million, a PE ratio of 15.29, a PEG ratio of 1.48 and a beta of 0.79. The company has a 50 day moving average of $51.85 and a two-hundred day moving average of $36.26. The company has a debt-to-equity ratio of 0.13, a current ratio of 2.25 and a quick ratio of 1.25.

Karat Packaging Company Profile

Karat Packaging Inc is a foodservice packaging company that manufactures and distributes disposable products for restaurants, cafés, convenience stores, supermarkets, institutional foodservice providers and other businesses. The company is headquartered in Chino, California, and serves customers primarily across North America through its distribution and manufacturing operations.

Its product portfolio includes paper and plastic cups, food containers, lids, cutlery, straws, gloves, napkins, bags and other supplies used for food preparation, packaging and takeout service.