Karat Packaging (NASDAQ:KRT) Sets New 12-Month High - Should You Buy?

Key Points

• Karat Packaging shares reached a new 52-week high of $40.15, up from the prior close of $38.73, while trading above both its 50-day and 200-day moving averages.
• Despite recent analyst downgrades, Wall Street’s consensus rating is “Hold”, with an average price target of $36.50—below the stock’s current level.
• The company exceeded quarterly expectations with $0.34 in EPS and $116.95 million in revenue, and offers a $1.80 annualized dividend yielding about 4.5%; however, its payout ratio is elevated at 113.92%.

Shares of Karat Packaging Inc. (NASDAQ:KRT - Get Free Report) reached a new 52-week high on Monday . The stock traded as high as $40.15 and last traded at $40.15, with a volume of 9491 shares traded. The stock had previously closed at $38.73.

Wall Street Analysts Forecast Growth

Several equities research analysts recently commented on KRT shares. Weiss Ratings restated a "hold (c+)" rating on shares of Karat Packaging in a research report on Thursday, June 11th. Zacks Research downgraded Karat Packaging from a "strong-buy" rating to a "hold" rating in a report on Tuesday, May 12th. Wall Street Zen lowered Karat Packaging from a "buy" rating to a "hold" rating in a research note on Saturday. The Goldman Sachs Group cut Karat Packaging to a "neutral" rating in a report on Thursday, June 4th. Finally, Bank of America raised their price objective on shares of Karat Packaging from $23.00 to $34.00 and gave the stock an "underperform" rating in a research report on Tuesday, July 14th. Two equities research analysts have rated the stock with a Buy rating, three have assigned a Hold rating and one has given a Sell rating to the stock. According to data from MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $36.50.

Karat Packaging Stock Up 0.9%

The company has a market cap of $795.90 million, a price-to-earnings ratio of 25.34, a price-to-earnings-growth ratio of 1.71 and a beta of 0.85. The company has a debt-to-equity ratio of 0.15, a quick ratio of 1.15 and a current ratio of 2.29. The stock's fifty day moving average is $31.46 and its two-hundred day moving average is $28.19.

Karat Packaging (NASDAQ:KRT - Get Free Report) last released its quarterly earnings results on Thursday, May 7th. The company reported $0.34 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $0.32 by $0.02. The business had revenue of $116.95 million during the quarter, compared to the consensus estimate of $112.98 million. Karat Packaging had a return on equity of 19.87% and a net margin of 6.61%. Sell-side analysts predict that Karat Packaging Inc. will post 1.78 earnings per share for the current fiscal year.

Karat Packaging Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Thursday, May 28th. Investors of record on Thursday, May 21st were given a dividend of $0.45 per share. The ex-dividend date of this dividend was Thursday, May 21st. This represents a $1.80 annualized dividend and a dividend yield of 4.5%. Karat Packaging's payout ratio is presently 113.92%.

Institutional Investors Weigh In On Karat Packaging

A number of institutional investors and hedge funds have recently bought and sold shares of KRT. Bank of Montreal Can bought a new stake in shares of Karat Packaging in the 4th quarter worth $5,216,000. KTF Investments LLC purchased a new stake in shares of Karat Packaging in the fourth quarter valued at about $5,075,000. Polar Asset Management Partners Inc. bought a new position in shares of Karat Packaging during the third quarter valued at about $5,039,000. Marshall Wace LLP bought a new position in shares of Karat Packaging during the second quarter valued at about $4,312,000. Finally, North Star Investment Management Corp. purchased a new position in Karat Packaging during the fourth quarter worth about $1,377,000. 25.20% of the stock is owned by hedge funds and other institutional investors.

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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