Karat Packaging (NASDAQ:KRT) Releases Quarterly Earnings Results, Beats Estimates By $0.06 EPS

Key Points

• Karat Packaging reported quarterly EPS of $0.34, beating estimates by $0.06, with revenue of $115.62 million (vs. $113.95M consensus) and profitability metrics including an 18.98% ROE and a 6.67% net margin.
• The company paid a $0.45 quarterly dividend (annualized $1.80), representing a 8.1% yield and a payout ratio of 120%, signaling a very high yield that may be unsustainably large relative to earnings.
• Shares traded down to $22.31 after the report; analysts’ consensus rating is "Reduce" with an average price target of $26.50, while institutional investors (notably Polar Asset) have recently increased positions.

Karat Packaging (NASDAQ:KRT - Get Free Report) issued its earnings results on Thursday. The company reported $0.34 EPS for the quarter, beating analysts' consensus estimates of $0.28 by $0.06, FiscalAI reports. Karat Packaging had a return on equity of 18.98% and a net margin of 6.67%.The firm had revenue of $115.62 million for the quarter, compared to the consensus estimate of $113.95 million.

Karat Packaging Price Performance

Shares of Karat Packaging stock traded down $0.51 during midday trading on Thursday, hitting $22.31. 61,710 shares of the company were exchanged, compared to its average volume of 65,002. The firm has a 50 day simple moving average of $24.56 and a 200-day simple moving average of $23.95. The company has a debt-to-equity ratio of 0.14, a current ratio of 2.14 and a quick ratio of 1.09. The firm has a market cap of $448.43 million, a P/E ratio of 14.87, a PEG ratio of 1.24 and a beta of 1.09. Karat Packaging has a 52 week low of $20.61 and a 52 week high of $32.68.

Karat Packaging Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, February 27th. Stockholders of record on Friday, February 20th were issued a $0.45 dividend. The ex-dividend date of this dividend was Friday, February 20th. This represents a $1.80 dividend on an annualized basis and a dividend yield of 8.1%. Karat Packaging's dividend payout ratio is presently 120.00%.

Wall Street Analysts Forecast Growth

Several analysts have commented on the stock. Zacks Research raised shares of Karat Packaging from a "strong sell" rating to a "hold" rating in a research report on Monday, January 5th. Bank of America lowered Karat Packaging from a "buy" rating to an "underperform" rating and lowered their target price for the company from $27.00 to $22.00 in a report on Monday, November 17th. Finally, Weiss Ratings restated a "hold (c+)" rating on shares of Karat Packaging in a report on Thursday, January 22nd. Three research analysts have rated the stock with a Hold rating and one has assigned a Sell rating to the company's stock. According to MarketBeat, the company presently has an average rating of "Reduce" and an average price target of $26.50.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the stock. Wellington Management Group LLP bought a new position in Karat Packaging during the 4th quarter valued at about $711,000. Polymer Capital Management US LLC grew its stake in shares of Karat Packaging by 15.3% during the fourth quarter. Polymer Capital Management US LLC now owns 14,421 shares of the company's stock worth $325,000 after purchasing an additional 1,918 shares during the period. Inspire Investing LLC raised its position in shares of Karat Packaging by 13.6% in the 4th quarter. Inspire Investing LLC now owns 20,784 shares of the company's stock valued at $469,000 after acquiring an additional 2,496 shares during the period. Engineers Gate Manager LP grew its holdings in shares of Karat Packaging by 13.2% in the 4th quarter. Engineers Gate Manager LP now owns 27,167 shares of the company's stock valued at $613,000 after buying an additional 3,170 shares during the period. Finally, Polar Asset Management Partners Inc. boosted its holdings in shares of Karat Packaging by 57.1% in the fourth quarter. Polar Asset Management Partners Inc. now owns 314,100 shares of the company's stock valued at $7,089,000 after buying an additional 114,204 shares during the period. 25.20% of the stock is currently owned by institutional investors and hedge funds.

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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