Karat Packaging (NASDAQ:KRT) Shares Gap Up - Time to Buy?

Key Points

• Shares gapped up premarket, opening at $30.10 (prior close $28.75) and last trading at $29.87 with about 6,267 shares changing hands, which is above the stock's average price target of $27.50.
• Analyst views are mixed: Wall Street Zen and Zacks recently upgraded to strong-buy, while Bank of America rates the stock "underperform"; the MarketBeat consensus remains a "Hold" (1 Strong Buy, 2 Hold, 1 Sell).
• Karat beat quarterly estimates (EPS $0.34 vs $0.28; revenue $115.62M vs $113.95M) and pays a quarterly dividend that annualizes to $1.80 ( yield 6.1% ), but the payout ratio is 115.38%, indicating potential sustainability concerns.

Karat Packaging Inc. (NASDAQ:KRT - Get Free Report)'s stock price gapped up prior to trading on Monday . The stock had previously closed at $28.75, but opened at $30.10. Karat Packaging shares last traded at $29.87, with a volume of 6,267 shares trading hands.

Wall Street Analysts Forecast Growth

A number of research firms have commented on KRT. Wall Street Zen upgraded shares of Karat Packaging from a "buy" rating to a "strong-buy" rating in a research report on Sunday, March 22nd. Zacks Research upgraded shares of Karat Packaging from a "hold" rating to a "strong-buy" rating in a research report on Friday, March 20th. Bank of America set a $24.00 price target on shares of Karat Packaging and gave the company an "underperform" rating in a research report on Friday, March 13th. Finally, Weiss Ratings restated a "hold (c+)" rating on shares of Karat Packaging in a research report on Thursday, January 22nd. One investment analyst has rated the stock with a Strong Buy rating, two have issued a Hold rating and one has issued a Sell rating to the company's stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Hold" and an average price target of $27.50.

Karat Packaging Trading Down 1.6%

The company's fifty day simple moving average is $26.52 and its two-hundred day simple moving average is $24.56. The company has a quick ratio of 1.13, a current ratio of 2.30 and a debt-to-equity ratio of 0.15. The company has a market capitalization of $593.31 million, a price-to-earnings ratio of 19.04, a price-to-earnings-growth ratio of 1.18 and a beta of 0.99.

Karat Packaging (NASDAQ:KRT - Get Free Report) last posted its earnings results on Thursday, March 12th. The company reported $0.34 earnings per share for the quarter, topping the consensus estimate of $0.28 by $0.06. The company had revenue of $115.62 million for the quarter, compared to analyst estimates of $113.95 million. Karat Packaging had a net margin of 6.73% and a return on equity of 19.63%. Research analysts forecast that Karat Packaging Inc. will post 1.66 earnings per share for the current fiscal year.

Karat Packaging Dividend Announcement

The business also recently disclosed a quarterly dividend, which was paid on Friday, February 27th. Stockholders of record on Friday, February 20th were given a dividend of $0.45 per share. The ex-dividend date of this dividend was Friday, February 20th. This represents a $1.80 annualized dividend and a dividend yield of 6.1%. Karat Packaging's dividend payout ratio is currently 115.38%.

Institutional Investors Weigh In On Karat Packaging

Several large investors have recently made changes to their positions in KRT. Bank of Montreal Can bought a new stake in shares of Karat Packaging during the fourth quarter worth $5,216,000. KTF Investments LLC bought a new stake in shares of Karat Packaging during the fourth quarter worth $5,075,000. Polar Asset Management Partners Inc. bought a new stake in shares of Karat Packaging during the third quarter worth $5,039,000. Marshall Wace LLP bought a new stake in shares of Karat Packaging during the second quarter worth $4,312,000. Finally, CWA Asset Management Group LLC bought a new stake in shares of Karat Packaging during the fourth quarter worth $2,398,000. Institutional investors own 25.20% of the company's stock.

About Karat Packaging

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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