Karat Packaging (NASDAQ:KRT) Shares Gap Up on Earnings Beat

Shares of Karat Packaging Inc. (NASDAQ:KRT) gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $22.31, but opened at $23.93. Karat Packaging shares last traded at $25.4550, with a volume of 51,427 shares trading hands.

The company reported $0.34 EPS for the quarter, topping the consensus estimate of $0.28 by $0.06. Karat Packaging had a net margin of 6.73% and a return on equity of 19.49%. The business had revenue of $115.62 million during the quarter, compared to the consensus estimate of $113.95 million.

Karat Packaging Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Friday, February 27th. Investors of record on Friday, February 20th were paid a dividend of $0.45 per share. This represents a $1.80 annualized dividend and a yield of 6.7%. The ex-dividend date of this dividend was Friday, February 20th. Karat Packaging’s payout ratio is presently 120.00%.

Karat Packaging News Summary

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Q4 2025 results beat expectations — Karat reported $0.34 EPS (vs. ~$0.28 consensus) and revenue of $115.6M, topping estimates and showing year‑over‑year top‑line growth. This beat is the primary near‑term catalyst for investor optimism. GlobeNewswire: Q4 & Full-Year 2025 Results
• Positive Sentiment: Management guided to low double‑digit sales growth for full‑year 2026 and highlighted expansion of its paper‑bag manufacturing footprint — a growth/strategic initiative that supports longer‑term revenue expansion. Seeking Alpha: 2026 Growth & Paper Bag Expansion
• Positive Sentiment: Operating and net income improved year‑over‑year (operating profit and net income increased, ROE remains strong), supporting the view that core profitability is intact despite input cost pressure. Yahoo Finance: Q4 Highlights
• Neutral Sentiment: Investors are parsing management commentary from the earnings call and transcript for color on demand trends, pricing pass‑through and timing of paper‑bag capacity additions. (See transcript for details.) Earnings Call Transcript
• Negative Sentiment: First‑quarter 2026 revenue guidance came in below street expectations ($111.9M–$114.0M vs. ~$116.4M consensus), which is a near‑term headwind and could cap upside if the company underdelivers on quarterly cadence. MarketBeat: Guidance Summary
• Negative Sentiment: Operating cash flow weakened sharply (cash from operations down ~88% YoY to ~$1.0M) and cash balances declined while capex increased — a liquidity and cash‑flow dynamic investors will watch as the company funds expansion. QuiverQuant: Earnings & Cash Flow

Wall Street Analysts Forecast Growth

A number of equities research analysts have issued reports on KRT shares. Zacks Research raised Karat Packaging from a “strong sell” rating to a “hold” rating in a research report on Monday, January 5th. Bank of America set a $24.00 price objective on Karat Packaging and gave the stock an “underperform” rating in a research report on Friday. Finally, Weiss Ratings restated a “hold (c+)” rating on shares of Karat Packaging in a research note on Thursday, January 22nd. Three research analysts have rated the stock with a Hold rating and one has given a Sell rating to the company. According to MarketBeat, Karat Packaging presently has an average rating of “Reduce” and an average target price of $27.50.

Hedge Funds Weigh In On Karat Packaging

Several large investors have recently bought and sold shares of KRT. State of Alaska Department of Revenue purchased a new stake in Karat Packaging during the 3rd quarter worth about $27,000. Clearstead Advisors LLC boosted its position in shares of Karat Packaging by 188.8% during the 4th quarter. Clearstead Advisors LLC now owns 1,493 shares of the company’s stock worth $34,000 after acquiring an additional 976 shares in the last quarter. CWM LLC increased its holdings in shares of Karat Packaging by 378.4% in the 3rd quarter. CWM LLC now owns 1,641 shares of the company’s stock valued at $41,000 after acquiring an additional 1,298 shares during the last quarter. Quarry LP purchased a new position in shares of Karat Packaging in the 3rd quarter valued at about $70,000. Finally, Deutsche Bank AG raised its position in shares of Karat Packaging by 142.8% during the 4th quarter. Deutsche Bank AG now owns 3,861 shares of the company’s stock worth $87,000 after acquiring an additional 2,271 shares in the last quarter. Hedge funds and other institutional investors own 25.20% of the company’s stock.

Karat Packaging Stock Up 20.7%

The firm has a 50-day moving average price of $24.65 and a two-hundred day moving average price of $23.95. The firm has a market cap of $541.09 million, a price-to-earnings ratio of 17.26, a price-to-earnings-growth ratio of 1.24 and a beta of 1.09. The company has a debt-to-equity ratio of 0.14, a quick ratio of 1.09 and a current ratio of 2.14.

Karat Packaging Company Profile

Karat Packaging Technologies, Inc (NASDAQ: KRT) is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.