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Kadant
(NYSE:KAI)
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Rating:70Outperform
Price Target:
$320.00
â–²(5.67% Upside)
Action:Reiterated
Date:09/11/26
KAI scores well on fundamentals, led by strong profitability, healthy free cash flow, and a very strong balance sheet profile, with a supportive earnings update that included raised full-year guidance. The overall score is held back primarily by weak technical trends (price below all key moving averages and bearish momentum), plus a relatively high P/E and modest dividend yield.
Positive Factors
Recurring Aftermarket Revenue
The record aftermarket business gives Kadant a recurring revenue stream supported by its installed base, reducing reliance on new capital-equipment projects. Replacement parts and consumables tied to uptime and efficiency can support margins and cash generation through industrial spending cycles.
Negative Factors
Margin Compression
The gross-margin decline shows that revenue growth is currently accompanied by less favorable economics. Capital mix shifts, product mix, and acquisition-related accounting effects can weigh on earnings quality, while sustained pressure would constrain reinvestment and reduce operating leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring Aftermarket Revenue
The record aftermarket business gives Kadant a recurring revenue stream supported by its installed base, reducing reliance on new capital-equipment projects. Replacement parts and consumables tied to uptime and efficiency can support margins and cash generation through industrial spending cycles.
Read all positive factors
Kadant (KAI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.11B
Dividend Yield0.52%
Average Volume (3M)159.14K
Price to Earnings (P/E)28.9
Beta (1Y)1.37
Revenue Growth12.50%
EPS Growth3.37%
CountryUS
Employees3,900
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)9.30
Shares Outstanding11,809,117
10 Day Avg. Volume150,497
30 Day Avg. Volume159,139
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 Upside18.05% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)12.56
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 industrial equipment, components, and systems, and by generating recurring revenue from aftermarket parts and services that support its installed base.
1) Product and system sales (capital equipm...
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
88
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.15B | 1.05B | 1.05B | 957.67M | 904.74M | 786.58M |
| Gross Profit | 512.06M | 475.73M | 466.15M | 416.31M | 389.56M | 337.37M |
| EBITDA | 249.88M | 210.38M | 222.69M | 200.71M | 207.05M | 151.18M |
| Net Income | 109.72M | 101.97M | 111.60M | 116.07M | 120.93M | 84.04M |
Balance Sheet | ||||||
| Total Assets | 1.89B | 1.71B | 1.43B | 1.18B | 1.15B | 1.13B |
| Cash, Cash Equivalents and Short-Term Investments | 134.53M | 122.68M | 94.66M | 106.45M | 79.72M | 94.16M |
| Total Debt | 0.00 | 374.50M | 322.84M | 135.61M | 223.44M | 294.07M |
| Total Liabilities | 855.55M | 721.11M | 572.22M | 399.43M | 494.31M | 566.60M |
| Stockholders Equity | 1.02B | 979.81M | 847.13M | 773.70M | 653.85M | 563.94M |
Cash Flow | ||||||
| Free Cash Flow | 159.99M | 154.28M | 134.26M | 133.69M | 74.43M | 149.65M |
| Operating Cash Flow | 183.44M | 171.33M | 155.26M | 165.54M | 102.63M | 162.42M |
| Investing Cash Flow | -383.57M | -205.42M | -319.14M | -30.79M | -29.52M | -154.47M |
| Financing Cash Flow | 242.87M | 54.01M | 159.91M | -111.11M | -80.57M | 22.81M |
Kadant Technical Analysis
Negative
302.84
Price Trends
300.09
Negative
303.86
Negative
309.42
Negative
Market Momentum
-9.69
Negative
33.31
Neutral
15.97
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KAI, the sentiment is Negative. The current price of 302.84 is above the 20-day moving average (MA) of 275.09, above the 50-day MA of 300.09, and below the 200-day MA of 309.42, indicating a bearish trend. The MACD of -9.69 indicates Negative momentum. The RSI at 33.31 is Neutral, neither overbought nor oversold. The STOCH value of 15.97 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KAI.
Kadant Risk Analysis
Kadant disclosed 34 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 | $9.29B | 25.82 | 16.63% | 1.17% | -0.26% | 29.38% | |
74 Outperform | $12.59B | 24.15 | 20.27% | 1.49% | 4.58% | 12.51% | |
70 Outperform | $3.11B | 28.91 | 11.12% | 0.52% | 12.50% | 3.37% | |
70 Outperform | $16.94B | 33.44 | 12.91% | 1.24% | 7.32% | 12.36% | |
69 Neutral | $23.55B | 24.25 | 9.17% | 1.66% | 4.41% | 9.23% | |
65 Neutral | $11.93B | 35.96 | 16.19% | 0.48% | 13.85% | 8.45% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
KAI
Kadant
268.83
-33.29
-11.02%
FLS
Flowserve
74.37
22.22
42.61%
GGG
Graco
78.00
-5.58
-6.67%
IEX
IDEX
232.99
68.96
42.04%
XYL
Xylem
101.79
-45.99
-31.12%
CR
Crane Company
208.20
29.19
16.31%
Kadant Corporate Events
Business Operations and StrategyExecutive/Board Changes
Kadant Announces Leadership Succession and CEO Transition Plan
Positive
Sep 10, 2026
On September 10, 2026, Kadant’s board approved a succession plan that elevates Michael C. Colwell to president and chief operating officer on October 1, 2026, and to president and chief executive officer on January 2, 2027, when he will also...
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...
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.