One-glance verdict
Within fair range
$247.73 our estimate vs market $264.15
Wall Street consensus: $361.67 (46.0% higher than our fair-value estimate)
7% above our estimate
Fundamentals snapshot
Kadant Inc.
KAI · NYQ · Industrials · Specialty Industrial Machinery
Current price
$264.15
52-week range
$244.87 - $354.07
Market cap
$3.12B
Balance sheet
Watch
10.19x Adequate
Net debt $376.10M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 9.5% last year.
- Reward Returns 11.3% on equity, ahead of 16% of its peers.
- Risk Net debt grew 104.3% over 3 years.
- Risk Insider ownership is only 0.7% (peer median: 0.8%).
What this company does
Kadant Inc.
Kadant Inc. makes specialized equipment and systems that help other companies process materials, like wood for paper or recycled goods. Their money mostly comes from selling these important machines, which means they do well when factories are busy and investing in upgrades. This matters because their products are key for industries that need to transform raw materials into usable goods.
How the company got here
Kadant Inc. started in 1991 as Thermo Fibertek, with an initial focus on equipment for papermaking and paper recycling. The company was spun off from its parent company, Thermo Electron, and rebranded as Kadant in 2001, signaling a broader scope beyond just paper-related machinery. Over the years, Kadant has grown by acquiring businesses that are leaders in their niche markets, often with long operating histories, some stretching back over a century. This strategy has allowed Kadant to build a diverse portfolio of specialized industrial products and systems.
What it actually does
Kadant provides essential technologies and engineered systems to various process industries, helping them operate more efficiently and sustainably. Think of them as a behind-the-scenes problem-solver for factories. Their products are crucial for tasks like managing the flow of liquids and materials, processing wood, and handling waste. While they don't make the final products you buy, their equipment is vital for the companies that do, ensuring that manufacturing processes run smoothly, use resources wisely, and minimize waste.
Flow Control
The Flow Control segment is all about managing the movement of fluids – like water, steam, or chemicals – within industrial processes. They design and manufacture systems such as rotary joints, which allow fluids to move between stationary and rotating parts of machinery, and specialized steam systems used in drying processes. These components are critical for keeping machinery running efficiently and preventing downtime in industries like paper and packaging, food processing, and metals manufacturing. This segment is a significant part of Kadant's business, providing essential parts that keep complex industrial operations flowing smoothly.
Industrial Processing
This segment focuses on equipment that helps process raw materials and recycle waste. For example, they make machines like debarkers and chippers used in the wood processing industry to prepare timber for use, and systems that help recycle paper and cardboard. They also provide equipment for cleaning boilers and processing fibers. Essentially, Kadant's Industrial Processing segment helps companies transform raw materials into usable products and recover valuable materials from waste streams, contributing to both efficiency and sustainability in industries like packaging, wood products, and recycling.
Material Handling
The Material Handling segment deals with the movement and processing of bulk materials. This includes equipment like conveyors and vibratory feeders that move materials around a factory, and balers that compress recyclable waste. They also produce fiber-based products. These systems are vital for industries such as mining, food processing, and waste management, ensuring that materials are transported, sorted, and prepared efficiently for further processing or disposal. This part of Kadant's business is key to managing the flow of goods and waste in various heavy industries.
What management is betting on now
Kadant's management is focused on driving 'Sustainable Industrial Processing,' which means developing technologies that help their customers improve efficiency, reduce waste, and use resources like energy and water more effectively. They are also strategically acquiring companies that are leaders in niche markets, particularly in their core areas of Flow Control, Material Handling, and forestry products. This approach aims to strengthen their existing businesses, expand their product offerings, and capitalize on the growing demand for environmentally conscious industrial solutions.
Price history
How the share price has moved
—
Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q3
$48.29M
FY2025 Q4
$46.31M
FY2026 Q1
$19.00M
FY2026 Q2
$36.51M
FY2026 Q3
$44.06M
FY2026 Q4
$54.71M
FY2027 Q1
$18.66M
FY2027 Q2
$42.56M
Revenue
$312.88M
Net income
$32.47M
Diluted EPS
2.75
Operating cash flow
$53.51M
Free cash flow
$42.56M
Fetching…
Sources
Revenue
$281.50M
Net income
$25.51M
Diluted EPS
2.16
Operating cash flow
$21.92M
Free cash flow
$18.66M
Fetching…
Sources
Revenue
$286.20M
Net income
$24.02M
Diluted EPS
2.04
Operating cash flow
$60.76M
Free cash flow
$54.71M
Fetching…
Sources
Revenue
$271.57M
Net income
$27.72M
Diluted EPS
2.35
Operating cash flow
$47.25M
Free cash flow
$44.06M
Fetching…
Sources
Revenue
$255.27M
Net income
$26.16M
Diluted EPS
2.22
Operating cash flow
$40.48M
Free cash flow
$36.51M
Fetching…
Sources
Revenue
$239.21M
Net income
$24.06M
Diluted EPS
2.04
Operating cash flow
$22.84M
Free cash flow
$19.00M
Fetching…
Sources
Revenue
$258.03M
Net income
$24.03M
Diluted EPS
2.04
Operating cash flow
$51.89M
Free cash flow
$46.31M
Fetching…
Sources
Revenue
$271.61M
Net income
$31.59M
Diluted EPS
2.68
Operating cash flow
$52.48M
Free cash flow
$48.29M
Fetching…
Sources
Is it cheap or expensive?
Fair value $247.73 vs current price $264.15
Wall Street consensus is the average analyst price target: $361.67 (46.0% higher than our fair-value estimate).
Our most-likely fair value is $247.73 a share — about 6.2% away from today's price of $264.15, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $376.1M. Interest coverage 10.2x.
Net debt
$376.10M
Interest coverage
10.19x
Kadant Inc.'s profit covers its interest bill about 10.2 times over.
Watch
Worse cushion
Baseline
Better cushion
KAI
BASELINE
Kadant Inc.
Total debt $510.63M Interest coverage 10.19x This is the baseline the peer rows are being compared against.
Total debt $308.32M Interest coverage 25.34x +149% vs KAI Carries about 2.5x more debt cushion than KAI.
Total debt $1.20B Interest coverage 14.28x +40% vs KAI Carries about 1.4x more debt cushion than KAI.
Total debt $483.44M Interest coverage 31.60x +210% vs KAI Carries about 3.1x more debt cushion than KAI.
Total debt $1.38B Interest coverage 23.03x +126% vs KAI Carries about 2.3x more debt cushion than KAI.
Total debt $588.50M Interest coverage 4.83x -53% vs KAI Carries about 2.1x less debt cushion than KAI.
What you should know
The case for and against KAI
3 Rewards
3 Risks
Rewards
-
Revenue grew 9.5% last year.
-
Returns 11.3% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Net debt grew 104.3% over 3 years.
-
Insider ownership is only 0.7% (peer median: 0.8%).
-
Operating margin compressed from 16.8% to 16.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
28.40x
Forward P/E
19.55x
P/B
3.05x
P/S
2.71x
EV/EBITDA
14.58x
PEG ratio
2.64x
Profitability
How much profit each dollar creates
Gross margin
44.8%
Operating margin
16.8%
Net margin
9.5%
ROE
11.3%
ROA
6.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.49x
Current ratio
2.59x
Quick ratio
1.39x
Total debt
$510.63M
Total cash
$134.53M
Growth
How the business has been compounding
Revenue TTM
$1.15B
Revenue 5Y CAGR
7.5%
EPS TTM
9.30
EPS 5Y CAGR
-5.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$183.44M
Free CF TTM
$154.28M
FCF margin
13.4%
Dividend
Shareholder payout
Yield
0.5%
Payout ratio
14.8%
Last ex-div date
2026-10-15