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K-Bro Linen
(TSX:KBL)
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Rating:65Neutral
Price Target:
C$51.00
â–²(10.65% Upside)
Action:Reiterated
Date:08/10/26
The score is driven primarily by steady fundamental performance (revenue growth, stable operating margins, and positive/improving free cash flow) tempered by higher balance-sheet leverage and thin net margins. Technicals are constructive with the stock above key moving averages, while valuation is a modest headwind due to the higher P/E despite a mid-level dividend yield.
Positive Factors
Recurring contracted revenue in essential end markets
K‑Bro operates a recurring, contracted service model focused on hospitality and healthcare where hygiene and continuous linen availability are essential. This creates predictable demand, high customer switching costs and steady revenue visibility over multiple years, supporting durable cash flows.
Negative Factors
Rising financial leverage
Debt growing faster than equity and a debt‑to‑equity ratio above 1.0 reduces financial flexibility. Higher leverage increases interest expense sensitivity, constrains capital allocation choices and raises default risk if revenues or margins deteriorate, weakening long‑term resilience.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring contracted revenue in essential end markets
K‑Bro operates a recurring, contracted service model focused on hospitality and healthcare where hygiene and continuous linen availability are essential. This creates predictable demand, high customer switching costs and steady revenue visibility over multiple years, supporting durable cash flows.
Read all positive factors
K-Bro Linen (KBL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$553.75M
Dividend Yield2.78%
Average Volume (3M)11.36K
Price to Earnings (P/E)25.7
Beta (1Y)0.52
Revenue Growth46.60%
EPS Growth-4.27%
CountryCA
Employees4,500
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)1.68
Shares Outstanding12,901,503
10 Day Avg. Volume12,032
30 Day Avg. Volume11,355
Financial Highlights & Ratios
PEG Ratio-1.58
Price to Book (P/B)1.52
Price to Sales (P/S)0.82
P/FCF Ratio8.77
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$52.00Price Target Upside12.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)2.25
Revenue Forecast (FY)C$598.64M
K-Bro Linen Business Overview & Revenue Model
Company Description
K-Bro Linen Inc., together with its subsidiaries, provides laundry and linen services to healthcare organizations, hotels, and other commercial accounts in Canada and the United Kingdom. The company engages in the processing, management, and distr...
How the Company Makes Money
KBL makes money by providing contracted, recurring textile-laundry services to business customers that need a steady supply of clean linens and/or garments. Revenue is primarily generated from service fees charged to customers for processing and s...
K-Bro Linen Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2026
Earnings Call Sentiment Positive
The earnings call highlights K-Bro's strong revenue growth and successful integration of the Stellar Mayan acquisition, which has significantly expanded its market presence in the U.K. However, the company faced challenges with decreased EBITDA margins and increased costs due to the acquisition's cost structure. Overall, the positive growth metrics and strategic positioning outweigh the cost challenges.Positive Updates
Record Revenue and Growth
K-Bro Linen Systems reported record results for Q3 2025 with revenue of $156 million and adjusted EBITDA of $33.5 million, marking the sixth consecutive quarter of record results. Consolidated revenue increased by 49% compared to Q3 2024.
Negative Updates
Decreased EBITDA Margins
Adjusted EBITDA margin decreased to 21.5% in 2025 from 22% in 2024. This decrease is due to the lower Stellar Mayan margin profile.
Read all updates
Q3-2025 Updates
Positive
Negative
Record Revenue and Growth
K-Bro Linen Systems reported record results for Q3 2025 with revenue of $156 million and adjusted EBITDA of $33.5 million, marking the sixth consecutive quarter of record results. Consolidated revenue increased by 49% compared to Q3 2024.
Read all positive updates
Company Guidance
During the K-Bro Linen Systems, Inc. Third Quarter 2025 Results Conference Call, CEO Linda McCurdy highlighted the company's record-breaking Q3 results, with revenue reaching $156 million and adjusted EBITDA at $33.5 million. These results represent a 49% increase in consolidated revenue compared to the same quarter in 2024, driven by a 67% rise in healthcare revenue and a 34% increase in hospitality revenue. The Stellar Mayan acquisition played a significant role, contributing to a 49.3% overall revenue increase and establishing a balanced revenue split between Canada and the U.K. The Canadian division saw an adjusted EBITDA margin rise to 22.8% due to labor efficiencies and the elimination of the Canadian carbon tax, while the U.K. division experienced a margin decrease to 20.3%, attributed to the Stellar Mayan margin profile. Net earnings grew by 8.9% to $8.9 million. Importantly, K-Bro reported a strong balance sheet with a net working capital of $95.7 million and a debt-to-EBITDA ratio of 2.7x, supported by substantial undrawn capacity on their credit facility.K-Bro Linen Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
55
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 592.20M | 506.78M | 373.61M | 320.88M | 276.62M | 223.99M |
| Gross Profit | 308.84M | 97.67M | 323.57M | 114.48M | 234.35M | 186.99M |
| EBITDA | 108.05M | 89.44M | 68.76M | 56.45M | 36.49M | 42.79M |
| Net Income | 21.73M | 17.99M | 18.71M | 17.61M | 3.91M | 8.69M |
Balance Sheet | ||||||
| Total Assets | 708.53M | 704.44M | 438.15M | 364.72M | 325.76M | 332.52M |
| Cash, Cash Equivalents and Short-Term Investments | 20.50M | 23.36M | 9.42M | 5.86M | 2.64M | 1.11M |
| Total Debt | 317.24M | 320.37M | 178.91M | 123.55M | 98.82M | 94.91M |
| Total Liabilities | 429.54M | 430.60M | 248.74M | 190.28M | 149.22M | 146.12M |
| Stockholders Equity | 278.99M | 273.85M | 189.41M | 174.43M | 176.54M | 186.40M |
Cash Flow | ||||||
| Free Cash Flow | 51.80M | 47.35M | 30.62M | 29.02M | 14.67M | 21.38M |
| Operating Cash Flow | 73.24M | 62.71M | 49.95M | 41.01M | 26.13M | 31.88M |
| Investing Cash Flow | -21.38M | -208.16M | -73.24M | -34.26M | -11.43M | -10.49M |
| Financing Cash Flow | -56.44M | 159.41M | 26.23M | -3.72M | -13.11M | -22.69M |
K-Bro Linen Technical Analysis
Neutral
46.09
Price Trends
45.74
Negative
42.97
Positive
38.72
Positive
Market Momentum
-0.31
Positive
33.64
Neutral
8.79
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KBL, the sentiment is Neutral. The current price of 46.09 is above the 20-day moving average (MA) of 45.70, above the 50-day MA of 45.74, and above the 200-day MA of 38.72, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 33.64 is Neutral, neither overbought nor oversold. The STOCH value of 8.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:KBL.
K-Bro Linen Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | C$869.04M | 19.59 | 15.18% | 2.88% | 8.97% | 27.62% | |
65 Neutral | C$553.75M | 25.70 | 7.89% | 2.78% | 46.60% | -4.27% | |
64 Neutral | C$161.42M | 32.87 | 10.60% | 3.88% | -4.58% | -36.77% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | C$462.87M | 1.33 | 22.24% | 381.75% | -29.78% | 88.96% | |
58 Neutral | C$462.87M | 1.33 | 22.24% | 300.37% | -29.78% | 88.96% |
* Industrials Sector Average
TSE:KBL
K-Bro Linen
43.18
6.93
19.12%
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Data Commun Management
2.58
1.17
82.85%
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13.91
4.80
52.64%
TSE:TCL.A
Transcontinental
5.37
2.51
87.43%
TSE:TCL.B
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6.83
2.89
73.62%
K-Bro Linen Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
K-Bro Linen posts strong Q2 results as Stellar Mayan integration supports growth
Positive
Aug 5, 2026
K-Bro Linen reported a 33.0% year-over-year jump in Q2 2026 revenue to $150.4 million, driven by a 49.6% surge in healthcare revenue and 15.4% growth in hospitality. Adjusted EBITDA rose 25.6% to $29.8 million and net earnings climbed to $7.7 mill...
Regulatory Filings and Compliance
BlackRock Adjusts Stake in Caledonia Mining, Triggers Major Holdings Disclosure
Neutral
Jul 16, 2026
Caledonia Mining reported that asset manager BlackRock, Inc. has crossed a regulatory threshold in its holding of Caledonia’s voting rights, triggering a notification under the AIM Rules. The change reflects BlackRock’s combined positi...
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.