Fact based stock research
Karat Packaging (NasdaqGS:KRT)

US48563L1017

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Karat Packaging stock research in summary

karatpackaging.com

ANALYSIS: With an Obermatt Combined Rank of 80 (better than 80% compared with investment alternatives), Karat Packaging (Trading & Distribution, USA) shares have much better financial characteristics than comparable stocks. Shares of Karat Packaging are low in value (priced high) with a consolidated Value Rank of 27 (worse than 73% of alternatives). But they show above-average growth (Growth Rank of 71) and are safely financed (Safety Rank of 94, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 80, is a strong buy recommendation based on Karat Packaging's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Karat Packaging exhibits low value (Obermatt Value Rank of 27), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 71). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 94) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	27
Growth Rank	71
Safety Rank	94
Combined Rank	80

Country	USA
Industry	Trading & Distribution
Index	NASDAQ
Size class	Medium

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Karat Packaging

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	15	57	27
GROWTH
GROWTH	n/a	89	87	71
SAFETY
SAFETY	n/a	43	91	94
SENTIMENT
SENTIMENT	n/a	97	98	^new
360° VIEW
360° VIEW	n/a	73	100	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Karat Packaging is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	n/a	15	57	27
GROWTH
GROWTH	n/a	89	87	71
SAFETY
SAFETY	n/a	43	91	94
COMBINED
COMBINED	n/a	45	96	80

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Karat Packaging the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 27 (worse than 73% compared with alternatives), Karat Packaging shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Karat Packaging. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 87% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 28 which means that the stock price compared with what market professionals expect for future profits is higher than 72% of comparable companies, indicating a low value concerning Karat Packaging's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 41 which means that the stock price compared with what market professionals expect for future profit levels is higher than 59% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 16 is also low. Compared with invested capital, the stock price is higher than for 84% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 27, is a hold recommendation based on Karat Packaging's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Karat Packaging? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Karat Packaging only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	n/a	39	43	28
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	n/a	69	51	41
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	n/a	36	38	16
DIVIDEND YIELD
DIVIDEND YIELD	n/a	1	84	87
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	n/a	15	57	27

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Karat Packaging; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 71 (better than 71% compared with alternatives), Karat Packaging shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Karat Packaging. Sales Growth has a rank of 86 which means that currently professionals expect the company to grow more than 86% of its competitors. Stock Returns are also above average with a rank of 85. But Capital Growth has only a rank of 4, which means that currently professionals expect the company to grow its invested capital less than 96% of its competitors. Profit Growth is also low, with a rank of only 47, which means that, currently, professionals expect the company to grow its profits below average. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 71, is a buy recommendation for growth and momentum investors. This is a surprising picture, as the messages from the operating growth indicators of revenues, profits, and invested capital are mixed, while stock returns are above average. It may indicate new intellectual properties, such as brand improvement or a strong market position that shows in revenues but not in the capital. The low profit-growth rate may indicate an early phase where costs are still high, and revenues don't fully cover upfront investments or fixed costs. The positive investor outlook with a 85% peer outperformance is reaffirmed in this case which may be a good sign for an investment into a well-protected high-growth company. This fact needs to be confirmed by researching the company website and press. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	n/a	86	69	86
PROFIT GROWTH
PROFIT GROWTH	n/a	98	90	47
CAPITAL GROWTH
CAPITAL GROWTH	n/a	87	4	4
STOCK RETURNS
STOCK RETURNS	n/a	9	97	85
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	n/a	89	87	71

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Karat Packaging.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2024, the company Karat Packaging has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Karat Packaging is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Karat Packaging. Leverage is at 80, meaning the company has a below-average debt-to-equity ratio. It has less debt than 80% of its competitors. Refinancing is at a rank of 52, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 52% of its competitors. Finally, Liquidity is also good at a rank of 83, which means that the company generates more profit to service its debt than 83% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), Karat Packaging has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Karat Packaging but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	n/a	18	86	80
REFINANCING
REFINANCING	n/a	56	59	52
LIQUIDITY
LIQUIDITY	n/a	67	72	83
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	n/a	43	91	94

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Karat Packaging and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	94	95	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	63	90	^new
MARKET PULSE
MARKET PULSE	n/a	92	83	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	97	98	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Karat Packaging.
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