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

Key Points

• Karat Packaging shares reached a new 52-week high of $50.85, above the analyst consensus price target of $47.00. The stock currently has a “Hold” consensus rating, with three Buy, two Hold, and one Sell rating.
• The company reported strong quarterly results, posting $1.48 in EPS versus the $0.47 consensus estimate and revenue of $136.30 million. Its net margin was 10.18% and return on equity was 30.62%.
• Karat Packaging raised its quarterly dividend to $0.47 per share, or $1.88 annually, providing a 3.8% yield; however, its dividend payout ratio is relatively high at 75.20%.

Shares of Karat Packaging Inc. (NASDAQ:KRT - Get Free Report) hit a new 52-week high on Friday . The company traded as high as $50.85 and last traded at $50.2550, with a volume of 824 shares trading hands. The stock had previously closed at $50.38.

Wall Street Analyst Weigh In

Several research firms recently weighed in on KRT. Bank of America upped their price target on Karat Packaging from $23.00 to $34.00 and gave the company an "underperform" rating in a research report on Tuesday, July 14th. William Blair raised Karat Packaging from a "market perform" rating to an "outperform" rating in a research note on Thursday, June 4th. The Goldman Sachs Group downgraded Karat Packaging to a "neutral" rating in a report on Thursday, June 4th. Wall Street Zen raised shares of Karat Packaging from a "hold" rating to a "buy" rating in a research report on Saturday, August 15th. Finally, Lake Street Capital restated a "buy" rating and set a $60.00 price target on shares of Karat Packaging in a report on Monday. Three research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company. According to MarketBeat, the stock presently has an average rating of "Hold" and a consensus price target of $47.00.

Karat Packaging Price Performance

The company has a debt-to-equity ratio of 0.13, a current ratio of 2.25 and a quick ratio of 1.25. The stock has a market capitalization of $993.29 million, a price-to-earnings ratio of 19.93, a PEG ratio of 1.45 and a beta of 0.84. The stock's 50 day simple moving average is $44.58 and its 200-day simple moving average is $34.14.

Karat Packaging (NASDAQ:KRT - Get Free Report) last announced its quarterly earnings results on Thursday, August 6th. The company reported $1.48 EPS for the quarter, topping the consensus estimate of $0.47 by $1.01. The company had revenue of $136.30 million for the quarter, compared to analyst estimates of $135.46 million. Karat Packaging had a net margin of 10.18% and a return on equity of 30.62%. On average, analysts expect that Karat Packaging Inc. will post 2.63 EPS for the current fiscal year.

Karat Packaging Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Friday, August 28th. Shareholders of record on Friday, August 21st were given a dividend of $0.47 per share. The ex-dividend date of this dividend was Friday, August 21st. This is a positive change from Karat Packaging's previous quarterly dividend of $0.45. This represents a $1.88 annualized dividend and a yield of 3.8%. Karat Packaging's dividend payout ratio (DPR) is currently 75.20%.

Hedge Funds Weigh In On Karat Packaging

Several institutional investors have recently bought and sold shares of KRT. Integrated Wealth Concepts LLC bought a new stake in shares of Karat Packaging during the 2nd quarter worth about $25,000. Clearstead Advisors LLC lifted its holdings in Karat Packaging by 188.8% in the 4th quarter. Clearstead Advisors LLC now owns 1,493 shares of the company's stock worth $34,000 after purchasing an additional 976 shares during the last quarter. Legal & General Group Plc acquired a new stake in Karat Packaging in the 2nd quarter worth approximately $75,000. Bard Associates Inc. bought a new stake in Karat Packaging during the second quarter worth approximately $167,000. Finally, Corient Private Wealth LP bought a new stake in Karat Packaging during the second quarter worth approximately $228,000. 25.20% of the stock is currently owned by institutional investors.

About Karat Packaging

Karat Packaging Inc is a foodservice packaging company that designs, manufactures, distributes, and sells disposable products for restaurants, foodservice operators, grocery stores, and other businesses. Its product portfolio includes cups and lids, food containers, plates, bowls, cutlery, straws, bags, napkins, gloves, and related supplies.

The company offers products made from materials including plastic, paper, and other alternative materials through brands such as Karat and Karat Earth.

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