One-glance verdict
Within fair range
$21.94 our estimate vs market $30.79
Wall Street consensus: $31.43 (43.3% higher than our fair-value estimate)
40% above our estimate
Fundamentals snapshot
Kennametal Inc.
KMT · NYQ · Industrials · Tools & Accessories
Current price
$30.79
52-week range
$21.70 - $43.81
Market cap
$2.35B
Balance sheet
Watch
16.86x Strong cushion
Net debt $667.91M. 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 19.8% last year.
- Reward Returns 23.9% on equity, ahead of 83% of its peers.
- Risk Forward P/E (13.2x) is higher than trailing (7.0x) - earnings are expected to drop.
- Risk Net debt grew 25.2% over 3 years.
What this company does
Kennametal Inc.
Kennametal makes tough materials like tungsten carbide, which are used to make tools for cutting metal and digging in the ground for industries like aerospace and oil. Their money mostly comes from selling these specialized tools and components to manufacturers around the world. Understanding how well they sell these items and manage their costs is important because it shows how profitable their business is.
How the company got here
Kennametal Inc. was founded in 1938 by Philip M. McKenna, a metallurgist who developed a groundbreaking tungsten-titanium carbide alloy for cutting tools. [2, 7] This innovation allowed for faster and more efficient machining, a significant advancement in the metalworking industry. [7, 11] During World War II, Kennametal's products were crucial for producing artillery shells, and the company even developed a specialized anti-tank projectile. [2] Over the decades, Kennametal expanded its capabilities through strategic acquisitions, including WIDIA Group and Allegheny Technologies' tungsten materials unit, broadening its expertise in hard materials and wear solutions. [2] The company has a history of innovation, with a significant portion of its sales often coming from new products introduced in recent years. [10]
What it actually does
Kennametal Inc. designs and manufactures high-performance cutting tools and engineered wear components. [2, 18] These products are made from advanced materials like tungsten carbides and ceramics, designed to withstand extreme conditions and improve efficiency in various industrial applications. [6, 18] Essentially, Kennametal creates specialized tools and parts that help other companies cut, shape, and endure tough materials in their manufacturing and operational processes. [6, 18] Their solutions are critical for industries where precision, durability, and productivity are paramount. [18]
Metal Cutting
This segment is Kennametal's largest revenue generator and focuses on creating tools used for machining metal. [5] These include items like milling cutters, drills, and turning tools, which are essential for shaping metal parts in industries such as aerospace, automotive, and general manufacturing. [3, 18] Think of these as the high-tech chisels and drills that factories use to precisely cut and form metal components for everything from airplane engines to car parts. [3, 18] The products in this segment are designed to cut faster, last longer, and improve the overall efficiency of metalworking operations. [7, 10]
Infrastructure
The Infrastructure segment produces engineered components made from hard materials like tungsten carbide and ceramics. [3, 6] These are not cutting tools but rather wear-resistant parts designed for applications where materials are subjected to extreme abrasion, impact, or high temperatures. [3, 6] Examples include components for the oil and gas industry (like frac seats), earth-cutting tools for mining and construction, and specialized parts for aerospace and defense. [3] Essentially, this part of the business provides durable components that can withstand harsh environments and keep critical equipment running longer. [3, 6]
What management is betting on now
Kennametal's current strategy centers on driving growth through innovation and operational improvements. [4, 8] The company is focusing on expanding its presence in key markets like aerospace and defense, where high-performance tooling is in high demand. [1, 8] They are also investing in modernizing their manufacturing facilities to boost productivity and enhance customer service. [4, 8] Additionally, Kennametal is enhancing its commercial processes to gain market share and explore new revenue streams. [4, 8] A significant part of their plan involves leveraging digital capabilities, including a recent investment in AI-powered manufacturing software, to offer more intelligent solutions to their customers. [19] The company has set ambitious financial targets through fiscal year 2027, aiming for organic sales growth, improved profit margins (measured by Adjusted EBITDA Margin), and increased earnings per share (EPS). [4, 8]
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q1
$21.00M
FY2025 Q2
$35.93M
FY2025 Q3
$5.29M
FY2025 Q4
$57.13M
FY2026 Q1
$-5.50M
FY2026 Q2
$42.41M
FY2026 Q3
$-20.91M
FY2026 Q4
$-96.91M
Revenue
$736.61M
Net income
$226.98M
Diluted EPS
2.93
Operating cash flow
$-73.69M
Free cash flow
$-96.91M
Fetching…
Sources
Revenue
$592.59M
Net income
$58.23M
Diluted EPS
0.75
Operating cash flow
$-2.92M
Free cash flow
$-20.91M
Fetching…
Sources
Revenue
$529.52M
Net income
$33.88M
Diluted EPS
0.44
Operating cash flow
$55.12M
Free cash flow
$42.41M
Fetching…
Sources
Revenue
$497.97M
Net income
$23.30M
Diluted EPS
0.30
Operating cash flow
$17.49M
Free cash flow
$-5.50M
Fetching…
Sources
Revenue
$516.45M
Net income
$21.59M
Diluted EPS
0.28
Operating cash flow
$78.59M
Free cash flow
$57.13M
Fetching…
Sources
Revenue
$486.40M
Net income
$31.48M
Diluted EPS
0.41
Operating cash flow
$28.83M
Free cash flow
$5.29M
Fetching…
Sources
Revenue
$482.05M
Net income
$17.93M
Diluted EPS
0.23
Operating cash flow
$55.15M
Free cash flow
$35.93M
Fetching…
Sources
Revenue
$481.95M
Net income
$22.12M
Diluted EPS
0.28
Operating cash flow
$45.75M
Free cash flow
$21.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $21.94 vs current price $30.79
Wall Street consensus is the average analyst price target: $31.43 (43.3% higher than our fair-value estimate).
Our most-likely fair value is $21.94 a share — about 28.7% away from today's price of $30.79, so the stock currently looks fairly priced.
Is it drowning in debt?
Watch
Net debt $667.9M. Interest coverage 16.9x.
Net debt
$667.91M
Interest coverage
16.86x
Kennametal Inc.'s profit covers its interest bill about 16.9 times over. which is stronger than every peer shown here.
Watch
Worse cushion
Baseline
Better cushion
KMT
BASELINE
Kennametal Inc.
Total debt $763.71M Interest coverage 16.86x This is the baseline the peer rows are being compared against.
Total debt $184.79M Interest coverage 14.06x -17% vs KMT Carries about 1.2x less debt cushion than KMT.
Total debt $275.14M Interest coverage 4.08x -76% vs KMT Carries about 4.1x less debt cushion than KMT.
Total debt $350.60M Interest coverage 4.20x -75% vs KMT Carries about 4.0x less debt cushion than KMT.
Total debt $2.20B Interest coverage 5.13x -70% vs KMT Carries about 3.3x less debt cushion than KMT.
What you should know
The case for and against KMT
3 Rewards
3 Risks
Rewards
-
Revenue grew 19.8% last year.
-
Returns 23.9% on equity, ahead of 83% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Forward P/E (13.2x) is higher than trailing (7.0x) - earnings are expected to drop.
-
Net debt grew 25.2% over 3 years.
-
Insider ownership is only 0.8% (peer median: 1.7%).
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)
6.97x
Forward P/E
13.19x
P/B
1.49x
P/S
1.00x
EV/EBITDA
4.93x
PEG ratio
1.25x
Profitability
How much profit each dollar creates
Gross margin
41.3%
Operating margin
41.3%
Net margin
14.5%
ROE
23.9%
ROA
10.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.47x
Current ratio
2.62x
Quick ratio
0.74x
Total debt
$763.71M
Total cash
$95.79M
Growth
How the business has been compounding
Revenue TTM
$2.36B
Revenue 5Y CAGR
4.0%
EPS TTM
4.42
EPS 5Y CAGR
44.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$-4.01M
Free CF TTM
$-80.91M
FCF margin
-3.4%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
18.1%
Last ex-div date
2026-08-11