Kornit Digital Ltd. (NASDAQ: KRNT)

Sector: Industrials Industry: Specialty Industrial Machinery CIK: 0001625791
Market Cap 707.44 Mn
P/B 0.99
P/E -52.33
P/S 3.40
ROIC (Qtr) -4.02
Div Yield % 0.00
Rev 1y % (Qtr) -3.03
Total Debt (Qtr) 18.61 Mn
Debt/Equity (Qtr) 0.03
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About

Kornit Digital Ltd., a prominent player in the global market with the ticker symbol KRNT, operates in the printed textile industry, providing innovative digital solutions that have been transforming the industry's landscape. The company has been instrumental in shifting demand generators and fulfillers from conventional analog processes to cutting-edge digital processes. Kornit's primary business activities encompass the development and provision of digital printing systems, ink, and other consumables, along with associated software and value-added...

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Investment thesis

Bull case

  • Strong operating cash flow of 24.45M provides robust 1.31x coverage of total debt 18.61M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 35.48M provide 9.13x coverage of short-term debt 3.89M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 731.92M provides 39.32x coverage of total debt 18.61M, indicating robust asset backing and low credit risk.
  • Tangible assets of 731.92M provide exceptional 478.69x coverage of deferred revenue 1.53M, showing strong service capability backing.
  • Short-term investments of 422.37M provide solid 28.65x coverage of other current liabilities 14.74M, indicating strong liquidity.

Bear case

  • Investment activities of 3.13M provide weak support for R&D spending of 37.73M, which is 0.08x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Short-term investments of 422.37M significantly exceed cash reserves of 35.48M, which is 11.91x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of 24.45M shows concerning coverage of stock compensation expenses of 21.94M, with a 1.11 ratio indicating potential earnings quality issues.
  • Operating earnings of (34.57M) show weak coverage of depreciation charges of 11.90M, with a -2.91 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 3.17M provides weak coverage of capital expenditures of 21.27M, with a 0.15 ratio suggesting additional external financing needs for growth initiatives.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Specialty Industrial Machinery
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 GEV GE Vernova Inc. 224.93 Bn 194.57 6.14 0.00 Bn
2 ETN Eaton Corp plc 153.13 Bn 38.99 5.75 11.22 Bn
3 PH Parker-Hannifin Corp 135.87 Bn 165.29 12.09 9.87 Bn
4 EMR Emerson Electric Co 111.68 Bn 47.10 4.65 13.41 Bn
5 ITW Illinois Tool Works Inc 86.68 Bn 28.27 5.40 8.97 Bn
6 CMI Cummins Inc 82.13 Bn 28.89 2.44 7.55 Bn
7 AME Ametek Inc/ 53.79 Bn 36.34 7.27 2.28 Bn
8 ROK Rockwell Automation, Inc 43.80 Bn 44.24 5.11 3.68 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.89 2.28
EV to Cash from Ops. EV/CFO 28.14 37.14
EV to Debt EV to Debt 36.96 34.39
EV to EBIT EV/EBIT -19.90 27.71
EV to EBITDA EV/EBITDA -30.34 25.34
EV to Free Cash Flow [EV/FCF] EV/FCF 216.66 133.36
EV to Market Cap EV to Market Cap 0.97 1.04
EV to Revenue EV/Rev 3.30 39.88
Price to Book Value [P/B] P/B 0.99 6.22
Price to Earnings [P/E] P/E -52.33 143.63
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 2.57
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.73
Dividend per Basic Share Div per Share (Qtr) 0.00 0.91
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 82.53
Interest Coverage Int. cover (Qtr) 1.58 12.34
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -40.52 -45.99
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 1.35 118.48
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 10.01
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 11.83 -283.03
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 6.56 -36.87
EBIT Growth (1y) % EBIT 1y % (Qtr) 7.35 -80.72
EBT Growth (1y) % EBT 1y % (Qtr) 15.45 -120.93
EPS Growth (1y) % EPS 1y % (Qtr) 14.29 -39.22
FCF Growth (1y) % FCF 1y % (Qtr) -90.55 85.55
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.55 0.87
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.27 0.62
Cash Payout Ratio Cash Payout Ratio 0.00 0.10
Cash Ratio Cash Ratio (Qtr) 0.84 3.01
Current Ratio Curr Ratio (Qtr) 14.18 4.97
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 0.38
Interest Cover Ratio Int Coverage (Qtr) 1.58 12.34
Times Interest Earned Times Interest Earned (Qtr) 1.58 12.34
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -10.90 -7,291.27
EBIT Margin % EBIT Margin % (Qtr) -16.61 -7,413.30
EBT Margin % EBT Margin % (Qtr) -6.08 -9,015.79
Gross Margin % Gross Margin % (Qtr) 44.30 -32.61
Net Profit Margin % Net Margin % (Qtr) -6.50 -7,962.06