Karat Packaging Inc. (KRT) AI Stock Analysis

Karat Packaging Inc. is a manufacturer and distributor specializing in single-use disposable products tailored for restaurant and foodservice environments. Based in Chino, California, the company produces items across plastic, paper, biopolymer-based, and compostable materials. Its offerings include food containers, take-out packaging, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, and gloves, marketed under the Karat Earth brand. Karat Packaging serves domestic and regional distributors, restaurant chains, retail outlets, and online customers, while also providing new product development, design, printing, and logistics services.

Karat Packaging generated a 5-year revenue CAGR of 9.6% from FY2020 to FY2025. Annual revenue grew 10.7% in FY2025 to $467.7M, following $422.6M in FY2024 and $405.7M in FY2023. Net income was $31.5M in FY2025, compared to $30.0M in FY2024 and $32.5M in FY2023. Gross margin reached 36.8% in FY2025, down from 38.9% in FY2024, while operating margin stood at 8.8%. For the latest quarter ended June 30, 2026, Karat Packaging reported quarterly revenue growth of 9.9% year-over-year and quarterly earnings growth of 170.4% year-over-year, bringing trailing twelve-month EPS to $2.50.

As of June 30, 2026, Karat Packaging held $54.1M in cash and short-term investments against total debt of $72.7M, resulting in net debt of $18.6M. The company maintains a current ratio of 2.25 and a debt-to-equity ratio of 0.44 on shareholders' equity of $166.5M. In FY2025, Karat Packaging generated $33.8M in operating cash flow and $29.3M in free cash flow. Capital expenditures for FY2025 were $4.5M, while capital returns included $3.0M in share buybacks and $36.1M in dividends paid.

Karat Packaging has an enterprise value of $1.03B and a market capitalization of $1.06B. It trades at a trailing P/E of 21.3x, compared to 18.0x for the median of its US-listed Consumer Cyclical peers. The stock's EV-to-EBITDA stands at 13.8x, above the peer median of 11.1x, while its price-to-sales multiple is 2.2x versus the peer median of 0.7x. Over the past year, KRT posted a return of 127.3%, outperforming the S&P 500 (SPY) return of 16.8%.

Karat Packaging pays a forward annual dividend of $1.88 per share, yielding 3.53% based on a payout ratio of 72.8%. The company pays dividends quarterly and has maintained 5 consecutive years of dividend payments. Its last ex-dividend date was August 21, 2026.

Wall Street coverage consists of 3 analysts, with 2 Strong Buy ratings and 1 Sell rating. The mean price target is $46.50, which sits 12.8% below the last close of $53.31. For the current fiscal year ending December 31, 2026, consensus estimates project EPS of $2.72 on revenue of $524.9M. Over the last four quarters, the company beat EPS estimates 2 times. The next earnings release is scheduled for November 5, 2026.

This page is an AI-written research summary of Karat Packaging Inc. (KRT). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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