Karat Packaging (NASDAQ:KRT) Rating Lowered to Buy at Wall Street Zen

Key Points

• Wall Street Zen downgraded Karat Packaging from “strong-buy” to “buy”, adding to a mixed analyst backdrop. MarketBeat notes the stock now carries a consensus “Hold” rating with a consensus target price of $31.33.
• Karat Packaging beat first-quarter earnings expectations, reporting $0.34 EPS versus the $0.32 estimate and $116.95 million in revenue versus $112.98 million expected. Management also pointed to solid profitability and operating momentum.
• Despite the earnings beat, second-quarter revenue guidance of $133.9 million to $136.4 million came in below the $139.2 million consensus, which likely pressured sentiment. The company also expects 8% to 10% net sales growth and is targeting a 35% to 37% gross margin.

Karat Packaging (NASDAQ:KRT - Get Free Report) was downgraded by investment analysts at Wall Street Zen from a "strong-buy" rating to a "buy" rating in a research note issued on Saturday.

Several other equities analysts have also commented on KRT. Zacks Research raised shares of Karat Packaging from a "hold" rating to a "strong-buy" rating in a report on Friday, March 20th. Bank of America set a $24.00 target price on shares of Karat Packaging and gave the company an "underperform" rating in a report on Friday, March 13th. Lake Street Capital reissued a "buy" rating and issued a $39.00 target price on shares of Karat Packaging in a report on Friday. Finally, Weiss Ratings reissued a "hold (c+)" rating on shares of Karat Packaging in a report on Thursday, January 22nd. One analyst has rated the stock with a Strong Buy rating, one has given a Buy rating, two have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Karat Packaging has a consensus rating of "Hold" and a consensus target price of $31.33.

Karat Packaging Price Performance

Shares of Karat Packaging stock opened at $28.07 on Friday. The company has a quick ratio of 1.13, a current ratio of 2.30 and a debt-to-equity ratio of 0.15. Karat Packaging has a twelve month low of $20.61 and a twelve month high of $32.68. The stock has a market capitalization of $560.39 million, a price-to-earnings ratio of 17.77, a price-to-earnings-growth ratio of 1.18 and a beta of 0.93. The company has a 50-day simple moving average of $27.35 and a two-hundred day simple moving average of $25.00.

Karat Packaging (NASDAQ:KRT - Get Free Report) last released its earnings results on Thursday, May 7th. The company reported $0.34 EPS for the quarter, beating the consensus estimate of $0.32 by $0.02. Karat Packaging had a net margin of 6.61% and a return on equity of 19.71%. The firm had revenue of $116.95 million for the quarter, compared to analyst estimates of $112.98 million. Analysts forecast that Karat Packaging will post 1.98 EPS for the current year.

Institutional Investors Weigh In On Karat Packaging

Several hedge funds and other institutional investors have recently made changes to their positions in the stock. Vanguard Group Inc. grew its holdings in shares of Karat Packaging by 12.0% during the 3rd quarter. Vanguard Group Inc. now owns 477,450 shares of the company's stock valued at $12,037,000 after purchasing an additional 51,179 shares during the last quarter. Wasatch Advisors LP grew its holdings in shares of Karat Packaging by 3.3% during the 2nd quarter. Wasatch Advisors LP now owns 330,961 shares of the company's stock valued at $9,320,000 after purchasing an additional 10,617 shares during the last quarter. Ranger Investment Management L.P. grew its holdings in shares of Karat Packaging by 0.6% during the 3rd quarter. Ranger Investment Management L.P. now owns 322,536 shares of the company's stock valued at $8,131,000 after purchasing an additional 1,980 shares during the last quarter. Polar Asset Management Partners Inc. grew its holdings in shares of Karat Packaging by 57.1% during the 4th quarter. Polar Asset Management Partners Inc. now owns 314,100 shares of the company's stock valued at $7,089,000 after purchasing an additional 114,204 shares during the last quarter. Finally, Bank of Montreal Can bought a new stake in shares of Karat Packaging during the 4th quarter valued at approximately $5,216,000. 25.20% of the stock is owned by institutional investors.

Trending Headlines about Karat Packaging

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

• Positive Sentiment: First-quarter 2026 results beat expectations, with EPS of $0.34 versus the $0.32 consensus and revenue of $116.95 million above estimates. Management also highlighted strong top-line growth and solid profitability, which supports the company’s operating momentum. Karat Packaging Reports First Quarter 2026 Financial Results
• Positive Sentiment: The company said it expects second-quarter net sales to rise 8% to 10% and is targeting a 35% to 37% gross margin, signaling continued growth and healthy profitability despite cost pressure. Karat Packaging expects 2Q net sales up 8% to 10% while targeting 35% to 37% gross margin
• Neutral Sentiment: Management’s earnings call and related commentary point to online sales growth and sourcing diversification as offsetting cost pressures, suggesting the business is adapting but still facing margin-related headwinds. KRT Q1 deep dive: Online sales and sourcing diversification drive growth amid cost pressures
• Neutral Sentiment: The company also announced a quarterly dividend of $0.45 per share, which may appeal to income investors, but it does not appear to be the main driver of the stock’s recent move. Karat Packaging stock and dividend information
• Negative Sentiment: Second-quarter revenue guidance of $133.9 million to $136.4 million came in below the $139.2 million consensus, which likely weighed on sentiment and helps explain the stock’s decline despite the earnings beat. Karat Packaging guidance and earnings report

Karat Packaging Company Profile

Karat Packaging Technologies, Inc NASDAQ: KRT is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.

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