Short Interest in Karat Packaging Inc. (NASDAQ:KRT) Grows By 21.9%

Key Points

• Short interest rose 21.9% to 179,976 shares as of March 31, roughly 2.7% of shares sold short, with a short-interest ratio of 1.8 days based on average daily volume.
• High dividend: the company pays a $0.45 quarterly dividend ($1.80 annualized) for a 6.3% yield, but the payout ratio is 115.38%, which may be unsustainable.
• Mixed fundamentals and analyst view: Karat beat Q4 EPS and revenue estimates (EPS $0.34 vs. $0.28), yet analysts are split (average rating "Hold", $27.50 consensus target) while the stock trades near $28.75 (market cap ≈ $574M, PE ~18.4).

Karat Packaging Inc. (NASDAQ:KRT - Get Free Report) saw a large growth in short interest in March. As of March 31st, there was short interest totaling 179,976 shares, a growth of 21.9% from the March 15th total of 147,593 shares. Approximately 2.7% of the shares of the stock are sold short. Based on an average daily volume of 101,077 shares, the short-interest ratio is currently 1.8 days.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently made changes to their positions in the company. Stifel Financial Corp raised its stake in shares of Karat Packaging by 1.8% during the 4th quarter. Stifel Financial Corp now owns 22,798 shares of the company's stock worth $515,000 after buying an additional 398 shares during the last quarter. First Trust Advisors LP raised its stake in shares of Karat Packaging by 1.9% during the 4th quarter. First Trust Advisors LP now owns 27,345 shares of the company's stock worth $617,000 after buying an additional 508 shares during the last quarter. Lazard Asset Management LLC raised its stake in shares of Karat Packaging by 1.9% during the 2nd quarter. Lazard Asset Management LLC now owns 40,390 shares of the company's stock worth $1,137,000 after buying an additional 770 shares during the last quarter. Clearstead Advisors LLC raised its stake in shares of Karat Packaging by 188.8% during the 4th quarter. Clearstead Advisors LLC now owns 1,493 shares of the company's stock worth $34,000 after buying an additional 976 shares during the last quarter. Finally, CWM LLC raised its stake in shares of Karat Packaging by 61.5% during the 4th quarter. CWM LLC now owns 2,651 shares of the company's stock worth $60,000 after buying an additional 1,010 shares during the last quarter. Institutional investors and hedge funds own 25.20% of the company's stock.

Karat Packaging Trading Up 0.6%

NASDAQ:KRT opened at $28.75 on Friday. The company has a market capitalization of $573.85 million, a PE ratio of 18.43, a price-to-earnings-growth ratio of 1.11 and a beta of 0.99. The company has a quick ratio of 1.13, a current ratio of 2.30 and a debt-to-equity ratio of 0.15. Karat Packaging has a 52-week low of $20.61 and a 52-week high of $32.68. The stock has a fifty day simple moving average of $26.43 and a 200-day simple moving average of $24.53.

Karat Packaging (NASDAQ:KRT - Get Free Report) last released its quarterly earnings results on Thursday, March 12th. The company reported $0.34 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.28 by $0.06. The business had revenue of $115.62 million during the quarter, compared to the consensus estimate of $113.95 million. Karat Packaging had a return on equity of 19.63% and a net margin of 6.73%. On average, equities research analysts expect that Karat Packaging will post 1.66 earnings per share for the current fiscal year.

Karat Packaging Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Friday, February 27th. Stockholders of record on Friday, February 20th were paid a dividend of $0.45 per share. This represents a $1.80 annualized dividend and a dividend yield of 6.3%. The ex-dividend date of this dividend was Friday, February 20th. Karat Packaging's payout ratio is 115.38%.

Wall Street Analyst Weigh In

KRT has been the topic of several research analyst reports. 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 target price on shares of Karat Packaging and gave the stock an "underperform" rating in a research report on Friday, March 13th. Weiss Ratings restated a "hold (c+)" rating on shares of Karat Packaging in a research report on Thursday, January 22nd. Finally, 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. One investment analyst has rated the stock with a Strong Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat, the stock has an average rating of "Hold" and a consensus target price of $27.50.

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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