Karat Packaging Inc.
$26.62
-2.9%Karat Packaging Inc. manufactures and distributes single-use disposable products in plastic, paper, biopolymer-based, and other compostable forms used in various restaurant and foodservice settings. It provides food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves, and other products under the Karat Earth brand. The company offers its products to domestic and regional distributors, restaurant chains, retail establishments, and online customers. It also provides new product development, design, printing, and logistics services. Karat Packaging Inc. was founded in 2000 and is based in Chino, California.
At a Glance
Live SnapshotIntrinsic Alpha Methodology
Thesis Lenses
Signal
High confidenceValuation multiple is mid-range (P/E 17.0).
Valuation inputs: P/E 17.0, earnings yield +5.9%, momentum -2.9%.
If multiples stay elevated while momentum fades, downside repricing risk rises.
Driver
High confidenceReturn profile is strong (ROE +21.1%, ROIC +12.9%).
Profitability stack: net margin +6.7%, ROE +21.1%, ROIC +12.9%.
Quality deterioration often appears in margins before it shows up in headline EPS.
Risk
High confidenceRisk profile is balanced but has notable pressure points to monitor.
Risk factors: liabilities/assets +45.5%, momentum -2.9%, net margin +6.7%.
Higher leverage with weak momentum and thin margins can amplify drawdown severity.
Karat Packaging Inc. Market vs Earnings Trajectory
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Karat Packaging Inc. Fair Value Envelope
Karat Packaging Inc. Profit Bridge
Profitability Analysis
Gross Margin
Strong gross margins indicate healthy pricing and efficient production or service delivery.
Operating Margin
Acceptable margins but limited operational leverage. Operating expense control is important.
Net Profit Margin
Moderate profitability with room for improvement. Monitor interest expenses and tax efficiency.
Effective Tax Rate
Moderate tax rate typical for most corporations. Represents standard tax burden on profits.
Profitability Insight
Margin squeeze alert: Healthy gross margins but weak operating margins suggest excessive operating expenses. Cost optimization could unlock significant value.
Karat Packaging Inc. Cash Conversion Engine
Cash Flow Quality Analysis
CapEx Intensity
Asset-light business model. Low capital requirements leave more cash available for shareholders and growth investments.
FCF Growth Trend
Significant FCF decline raises concerns. Urgent review needed of operational performance and capital allocation.
Working Capital Impact
Significant working capital drain. Growth may be consuming cash through inventory buildup or receivables extension—monitor closely.
Cash Flow Quality Insight
Deteriorating cash generation: Both declining FCF and weak conversion rate signal fundamental challenges. Investigate margin pressure, rising costs, or working capital issues.
Karat Packaging Inc. Funding & Solvency Profile
Financial Health Analysis
Current Ratio
Excellent liquidity position. The company can easily cover its short-term obligations with substantial cushion.
Debt-to-Equity Ratio
Balanced capital structure with moderate leverage. Equity exceeds debt, suggesting healthy financial stability.
Working Capital
Strong working capital position provides significant operational flexibility and financial cushion.
Asset Composition
Balanced asset mix between current and non-current assets, typical of many stable businesses.
Financial Health Insight
Strong financial foundation: Excellent liquidity combined with conservative leverage suggests the company is well-positioned to weather economic uncertainties and fund growth opportunities.
Karat Packaging Inc. Street Expectations Map
Wall Street analysts project that KRT stock may rise significantly over the coming 12 months. The consensus 1-year price target stands at 31.50, with estimates ranging from a low of 24.00 to a high of 39.00.
The consensus 1-year price target stands at 31.50, with estimates ranging from a low of 24.00 to a high of 39.00.
Analyst Consensus Analysis
Upside Potential
Strong upside potential. Consensus indicates attractive return opportunity with favorable risk-reward profile.
Analyst Agreement
Mixed analyst views. Wide target range suggests differing opinions on key value drivers, growth prospects, or risk factors.
Risk-Reward Profile
Favorable risk-reward. Potential upside significantly exceeds downside risk, offering asymmetric return profile attractive for risk-tolerant investors.
Analyst Conviction
Neutral sentiment. Fair value pricing with moderate agreement suggests wait-and-see approach or catalyst-driven opportunity.
Market Sentiment Insight
Asymmetric upside: Strong return potential with favorable risk-reward profile. The limited downside relative to upside makes this an attractive risk-adjusted opportunity for growth-oriented portfolios.
Karat Packaging Inc. Insider Positioning
During the last 12 months, insiders have purchased $30K and sold $46.62M worth of KRT shares, resulting in $46.59M of net selling activity.
3 Months
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0.00
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3-6 Months
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6-9 Months
1.4K
30.09K
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+30K
+$30K
9-12 Months
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1.7M
46.62M
-46.6M
-$46.62M
Top Buyers
Guo Jian
Director, Officer: Chief Financial Officer
$30K
Top Sellers
Cheng Marvin
10 Percent Owner, Officer: Vp-Manufacturing, Secy
$23.29M
Yu Alan
Director, 10 Percent Owner, Officer: Chief Executive Officer
$23.29M
Guo Jian
Director, Officer: Chief Financial Officer
$40K
Insider Activity Analysis
Net Insider Sentiment
Strong bearish signal with $46.59M net selling. Heavy insider selling may indicate concerns about valuation or near-term prospects.
Buy/Sell Ratio
Very poor ratio. Heavy selling with minimal buying suggests insiders may be concerned about valuation or outlook.
Insider Participation
3 insider sellers vs. 1 buyers. Widespread selling across multiple insiders may signal concerns.
krt Dividend History
Learning Layer
Related Guides
Build conviction on KRT by pairing this stock hub with focused valuation guides.
Research Paths
Snapshot
Start with context, operating signals, and key market metrics.
Value Model
Stress test fair value across bear, base, and bull assumptions.
Statements
Validate revenue quality, margins, and balance sheet durability.
Earnings Call
Read management commentary and compare it with reported outcomes.
Dividends
Check payout sustainability and long-term distribution behavior.
Analyst Expectations
Review consensus spread and where estimate risk is concentrated.