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

Key Points

• Karat Packaging reached a new 52-week high, trading as high as $56.00 and recently at $55.28, up 1.9%.
• The company reported quarterly EPS of $1.48, far above the $0.47 analyst consensus, while revenue of $136.3 million slightly exceeded estimates.
• Analysts have a consensus “Hold” rating and average price target of $47.00, below the current share price; Karat also raised its quarterly dividend to $0.47 per share, yielding about 3.4%.

Karat Packaging Inc. (NASDAQ:KRT - Get Free Report) hit a new 52-week high during mid-day trading on Monday. The company traded as high as $56.00 and last traded at $55.28, with a volume of 6,055 shares changing hands. The stock had previously closed at $54.58.

Analysts Set New Price Targets

A number of equities research analysts have weighed in on KRT shares. Bank of America boosted their price objective on Karat Packaging from $23.00 to $34.00 and gave the company an "underperform" rating in a research note on Tuesday, July 14th. Weiss Ratings upgraded shares of Karat Packaging from a "buy (b-)" rating to a "buy (b)" rating in a research report on Wednesday, August 12th. Wall Street Zen raised shares of Karat Packaging from a "hold" rating to a "buy" rating in a report on Saturday, August 15th. Finally, Lake Street Capital reaffirmed a "buy" rating and issued a $60.00 target price on shares of Karat Packaging in a report on Monday, September 14th. Three equities research analysts have rated the stock with a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Hold" and an average price target of $47.00.

Karat Packaging Stock Up 1.9%

The firm has a market cap of $1.11 billion, a price-to-earnings ratio of 22.25, a P/E/G ratio of 1.50 and a beta of 0.79. The firm's 50 day moving average price is $49.30 and its two-hundred day moving average price is $37.30. The company has a debt-to-equity ratio of 0.13, a current ratio of 2.25 and a quick ratio of 1.25.

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

Karat Packaging Increases Dividend

The business also recently disclosed 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. This represents a $1.88 dividend on an annualized basis and a yield of 3.4%. 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. Karat Packaging's payout ratio is 75.20%.

Institutional Inflows and Outflows

A number of institutional investors have recently modified their holdings of the stock. PDT Partners LLC acquired a new stake in shares of Karat Packaging in the 2nd quarter worth $1,106,000. BlackRock Inc. purchased a new position in Karat Packaging during the second quarter worth about $19,840,000. Bank of New York Mellon Corp purchased a new position in Karat Packaging during the second quarter worth about $5,337,000. Harel Insurance Investments & Financial Services Ltd. raised its holdings in Karat Packaging by 40.3% during the first quarter. Harel Insurance Investments & Financial Services Ltd. now owns 151,181 shares of the company's stock worth $4,221,000 after purchasing an additional 43,451 shares in the last quarter. Finally, Arrowstreet Capital Limited Partnership acquired a new stake in Karat Packaging in the first quarter valued at about $437,000. Institutional investors and hedge funds own 25.20% of the company's stock.

Karat Packaging Company Profile

Karat Packaging Inc is a manufacturer and distributor of disposable foodservice products and supplies. The company serves restaurants, cafés, foodservice distributors, grocery stores, convenience stores, and other commercial and institutional customers, primarily in North America.

Its product portfolio includes cups and lids, food containers, plates, bowls, cutlery, straws, napkins, gloves, bags, and related serving and packaging products. Karat Packaging offers products made from materials such as paper, plastic, aluminum, and compostable or other environmentally oriented alternatives, including products marketed under the Karat Earth brand.

Founded in 2000 and headquartered in Chino, California, the company operates through a combination of manufacturing, sourcing, distribution, and product development activities.

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