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Kadant
(NYSE:KAI)
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Rating:71Outperform
Price Target:
$370.00
â–²(18.45% Upside)
Action:Reiterated
Date:08/05/26
The score is driven primarily by solid underlying financial performance and a positive earnings update (record quarter and raised full-year guidance), supported by constructive technicals with the stock trading above major moving averages. The main constraint is valuation (high P/E and low yield), along with watch items around rising leverage and margin pressure tied to mix and acquisitions.
Positive Factors
Recurring Aftermarket Revenue
A record $214M in aftermarket sales indicates a large installed base driving repeat, higher-margin demand. Durable aftermarket revenue cushions cyclicality in capital spending, supports predictability of cash flows and margins, and underpins long-term service and parts profitability.
Negative Factors
Rising Leverage and Net Debt
Material increase in net debt and leverage from acquisition financing reduces financial flexibility and raises refinancing and interest-rate sensitivity. Higher leverage can constrain capital allocation choices, elevate funding costs, and limit ability to weather prolonged industry slowdowns.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Aftermarket Revenue
A record $214M in aftermarket sales indicates a large installed base driving repeat, higher-margin demand. Durable aftermarket revenue cushions cyclicality in capital spending, supports predictability of cash flows and margins, and underpins long-term service and parts profitability.
Read all positive factors
Kadant (KAI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.99B
Dividend Yield0.41%
Average Volume (3M)145.77K
Price to Earnings (P/E)36.3
Beta (1Y)1.36
Revenue Growth12.50%
EPS Growth3.37%
CountryUS
Employees4,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)8.77
Shares Outstanding11,808,462
10 Day Avg. Volume195,513
30 Day Avg. Volume145,769
Financial Highlights & Ratios
PEG Ratio-3.70
Price to Book (P/B)3.44
Price to Sales (P/S)3.20
P/FCF Ratio21.85
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$357.50Price Target Upside14.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)12.42
Revenue Forecast (FY)$1.20B
Kadant Business Overview & Revenue Model
Company Description
Kadant Inc. supplies technologies and engineered systems worldwide. The company operates through three segments: Flow Control, Industrial Processing, and Material Handling. The Flow Control segment develops, manufactures, and markets fluid-handlin...
How the Company Makes Money
Kadant makes money primarily by selling engineered capital equipment and by generating recurring aftermarket revenue tied to its installed base. A significant portion of revenue comes from (1) capital equipment and systems: large, higher-ticket sa...
Kadant Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call presented strong, record-setting operational and financial results including revenue, adjusted EBITDA, adjusted EPS and cash flow, supported by robust aftermarket demand, solid organic growth and positive contributions from recent acquisitions. These positives were tempered by margin pressure caused by mix shifts and acquisition-related amortization/deferrals, increased leverage from acquisition financing, and continued softness and timing uncertainty in capital equipment markets and certain regions. Management raised full-year revenue guidance but remained cautious on near-term capital spending timing.Positive Updates
Record Company Revenue
Revenue of $312.9 million in Q2 2026, up 23% year-over-year and a company record; bookings increased 16% to $312 million.
Negative Updates
Gross Margin Pressure
Consolidated gross margin declined 210 basis points to 43.8% year-over-year, driven by a higher capital mix, product mix shifts, amortization of acquired profit and inventory deferrals tied to the Profil acquisition.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Company Revenue
Revenue of $312.9 million in Q2 2026, up 23% year-over-year and a company record; bookings increased 16% to $312 million.
Read all positive updates
Company Guidance
Kadant raised its full‑year 2026 revenue guidance to $1.190–$1.210 billion (up from $1.178–$1.203B) and now expects adjusted EPS of $12.43–$12.68 (prior $12.33–$12.68), with adjusted EPS excluding approximately $2.17 of intangible amortization and $0.48 of acquisition‑related costs; Q3 revenue is guided to $297–$307 million with adjusted EPS of $2.90–$3.00 (excluding $0.55 of amortization and $0.07 of acquisition costs). Management noted the Q2 outperformance (adjusted EPS of $3.42 beat the prior high end by $0.44) but remains cautiously positioned for the back half of the year, and its 2026 guidance is based on assumptions of gross margin of 44.0–44.5%, SG&A of 27.2–27.7% of revenue, net interest expense of $19.5–$20.0 million, a tax rate of 27.8–28.3%, depreciation of $28.0–$28.5 million, and approximately $34 million of intangible amortization.Kadant Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
72
Positive
Cash Flow
75
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.09B | 1.05B | 1.05B | 957.67M | 904.74M | 786.58M |
| Gross Profit | 492.10M | 475.73M | 466.15M | 416.31M | 389.56M | 337.37M |
| EBITDA | 217.37M | 210.38M | 222.69M | 200.71M | 207.05M | 151.18M |
| Net Income | 103.42M | 101.97M | 111.60M | 116.07M | 120.93M | 84.04M |
Balance Sheet | ||||||
| Total Assets | 1.71B | 1.71B | 1.43B | 1.18B | 1.15B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 117.03M | 122.68M | 94.66M | 106.45M | 79.72M | 94.16M |
| Total Debt | 363.36M | 374.50M | 322.84M | 135.61M | 223.44M | 294.07M |
| Total Liabilities | 708.50M | 721.11M | 572.22M | 399.43M | 494.31M | 566.60M |
| Stockholders Equity | 995.60M | 979.81M | 847.13M | 773.70M | 653.85M | 563.94M |
Cash Flow | ||||||
| Free Cash Flow | 153.94M | 154.28M | 134.26M | 133.69M | 74.43M | 149.65M |
| Operating Cash Flow | 170.41M | 171.33M | 155.26M | 165.54M | 102.63M | 162.42M |
| Investing Cash Flow | -205.51M | -205.42M | -319.14M | -30.79M | -29.52M | -154.47M |
| Financing Cash Flow | 57.05M | 54.01M | 159.91M | -111.11M | -80.57M | 22.81M |
Kadant Technical Analysis
Positive
312.36
Price Trends
307.50
Positive
309.77
Positive
306.20
Positive
Market Momentum
7.45
Negative
65.87
Neutral
85.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAI, the sentiment is Positive. The current price of 312.36 is below the 20-day moving average (MA) of 313.80, above the 50-day MA of 307.50, and above the 200-day MA of 306.20, indicating a bullish trend. The MACD of 7.45 indicates Negative momentum. The RSI at 65.87 is Neutral, neither overbought nor oversold. The STOCH value of 85.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KAI.
Kadant Risk Analysis
Kadant disclosed 33 risk factors in its most recent earnings report. Kadant reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Kadant Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $4.16B | 18.64 | 21.21% | 1.10% | 5.88% | 49.15% | |
75 Outperform | $4.84B | 31.27 | 11.59% | 1.03% | 7.38% | -10.43% | |
71 Outperform | $3.99B | 36.30 | 11.44% | 0.45% | 12.50% | 3.37% | |
68 Neutral | $3.07B | 21.86 | 11.28% | 1.32% | 17.28% | -7.56% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $5.71B | 47.71 | 11.19% | 0.38% | 27.71% | -12.90% |
* Industrials Sector Average
KAI
Kadant
337.63
10.68
3.27%
CXT
Crane NXT
53.33
-5.41
-9.21%
FELE
Franklin Electric Co
109.46
17.42
18.92%
MWA
Mueller Water Products
26.65
1.24
4.88%
CSW
CSW Industrials
350.68
86.25
32.62%
Kadant Corporate Events
Business Operations and StrategyFinancial Disclosures
Kadant Raises 2026 Guidance Following Record Second Quarter
Positive
Aug 4, 2026
In its second quarter ended July 4, 2026, Kadant reported record revenue of about $313 million, up 23% year on year, and a 24% increase in net income to $32 million, despite a 210-basis-point decline in gross margin, reflecting mix and lower-margi...
Executive/Board ChangesShareholder Meetings
Kadant Shareholders Back Board Nominees and Governance Proposals
Positive
May 26, 2026
On May 20, 2026, Kadant Inc. stockholders held their 2026 annual meeting and elected Dr. John M. Albertine and Thomas C. Leonard to the board for three-year terms expiring in 2029, with both nominees receiving strong majority support despite some ...
Business Operations and StrategyFinancial Disclosures
Kadant Raises 2026 Revenue Guidance After Strong Quarter
Positive
May 5, 2026
Kadant reported strong first-quarter 2026 results on May 5, 2026, with revenue up 18% to $281.5 million and record bookings up 25% to $320.8 million, driven by robust aftermarket demand and recent acquisitions, despite a slight decline in gross ma...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.