One-glance verdict
Overvalued
$14.29 our estimate vs market $36.92
Wall Street consensus: $43.75 (206.2% higher than our fair-value estimate)
158% above our estimate, beyond the bull case
Fundamentals snapshot
Knowles Corporation
KN · NYQ · Technology · Electronic Components
Current price
$36.92
52-week range
$20.57 - $42.93
Market cap
$3.15B
Balance sheet
Watch
5.64x Adequate
Net debt $100.60M. 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 3.5% last year.
- Reward Returns 9.5% on equity, ahead of 50% of its peers.
- Risk Net debt grew 400.6% over 3 years.
- Risk Stock trades 29.7% above its 5-year average P/E.
What this company does
Knowles Corporation
Knowles Corporation makes tiny, high-performance electronic components, like miniature microphones and speakers for specialized uses. It earns most of its money selling these parts to manufacturers in medical technology for products like hearing aids and to the defense industry, both of which require extremely reliable parts. This focus on critical industries can create steady demand, and the company is also expanding into markets like electric vehicles.
How the company got here
Founded in 1946, Knowles built its reputation on tiny, specialized audio components, starting with parts for hearing aids in 1954. A major turning point came in 2014 when it was spun off from its parent company to become independent. More recently, in 2023, the company made a significant shift by selling its business that made microphones for consumer electronics like smartphones. At the same time, it bought a company called Cornell Dubilier, which makes specialized electronic parts called capacitors, to focus more on industrial, medical, and defense customers.
What it actually does
Knowles makes tiny, high-performance electronic parts that are essential for other products to work. You wouldn't buy a Knowles product in a store, but their components are inside devices you might use or encounter. For example, they make miniature microphones and speakers that help hearing aids reproduce sound clearly and enable voice control in all sorts of technology. They also create specialized electronic components, like capacitors (devices that store and release electrical energy) and filters, that are critical for the reliable operation of medical equipment, defense systems, and electric vehicles.
Precision Devices (PD)
This is the company's largest business, making up the majority of its revenue. It designs and sells high-performance electronic components, primarily capacitors and radio frequency (RF) filters (which help electronic devices manage radio signals without interference). The customers for these parts are typically in industries where reliability is extremely important, such as defense, medical technology, and industrial equipment. For example, their components might be found in an MRI machine, a military communication system, or deep underground in oil exploration tools.
Medtech & Specialty Audio (MSA)
This segment focuses on the company's original expertise: highly advanced, miniature audio components. It creates tiny microphones and balanced armature speakers (a type of speaker known for clear, detailed sound) for the hearing health market, including traditional and over-the-counter hearing aids. This part of the business also serves the premium audio market, providing components for high-end earphones that deliver superior sound quality. The customers are manufacturers of medical devices and premium audio equipment who need small, high-performing audio solutions.
What management is betting on now
Management is focusing the company on markets where performance and reliability are more important than price. They are moving away from the high-volume, fast-changing consumer electronics market and doubling down on sectors like medical technology, defense, and industrial electrification (the shift to electricity-powered equipment). A key part of this strategy was buying Cornell Dubilier to expand their portfolio of specialized capacitors and other electronic parts for these demanding industries. The goal is to win business where custom engineering and a long history of reliability allow them to build long-term relationships with customers.
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.
FY2024 Q2
$21.70M
FY2024 Q3
$49.10M
FY2025 Q1
$-2.70M
FY2025 Q2
$31.30M
FY2025 Q3
$21.40M
FY2026 Q1
$-11.50M
Revenue
$153.10M
Net income
$9.70M
Diluted EPS
0.11
Operating cash flow
$-700.00K
Free cash flow
$-11.50M
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Sources
Revenue
$162.20M
Net income
$21.00M
Diluted EPS
0.23
Operating cash flow
—
Free cash flow
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Sources
Revenue
$152.90M
Net income
$17.40M
Diluted EPS
0.20
Operating cash flow
$29.10M
Free cash flow
$21.40M
Fetching…
Sources
Revenue
$145.90M
Net income
$7.80M
Diluted EPS
0.09
Operating cash flow
$36.40M
Free cash flow
$31.30M
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Sources
Revenue
$132.20M
Net income
$-2.00M
Diluted EPS
-0.02
Operating cash flow
$1.30M
Free cash flow
$-2.70M
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Sources
Revenue
$9.90M
Net income
$18.50M
Diluted EPS
0.22
Operating cash flow
—
Free cash flow
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Sources
Revenue
$142.50M
Net income
$500.00K
Diluted EPS
0.01
Operating cash flow
$52.80M
Free cash flow
$49.10M
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Sources
Revenue
$204.70M
Net income
$-259.30M
Diluted EPS
-2.90
Operating cash flow
$24.90M
Free cash flow
$21.70M
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Sources
Is it cheap or expensive?
Fair value $14.29 vs current price $36.92
Wall Street consensus is the average analyst price target: $43.75 (206.2% higher than our fair-value estimate).
Our most-likely fair value is $14.29 a share — about 61.3% below today's price of $36.92, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Watch
Net debt $100.6M. Interest coverage 5.6x.
Net debt
$100.60M
Interest coverage
5.64x
Knowles Corporation's profit covers its interest bill about 5.6 times over. which is stronger than most peers shown here.
Watch
Worse cushion
Baseline
Better cushion
KN
BASELINE
Knowles Corporation
Total debt $150.20M Interest coverage 5.64x This is the baseline the peer rows are being compared against.
Total debt $130.46M Interest coverage 512.67x +8,992% vs KN Carries about 90.9x more debt cushion than KN.
Total debt $1.10B Interest coverage 1.47x -74% vs KN Carries about 3.8x less debt cushion than KN.
Total debt $89.89M Interest coverage 19.50x +246% vs KN Carries about 3.5x more debt cushion than KN.
Total debt $28.50M Interest coverage 43.42x +670% vs KN Carries about 7.7x more debt cushion than KN.
Total debt $2.44B Interest coverage 3.45x -39% vs KN Carries about 1.6x less debt cushion than KN.
What you should know
The case for and against KN
3 Rewards
3 Risks
Rewards
-
Revenue grew 3.5% last year.
-
Returns 9.5% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Net debt grew 400.6% over 3 years.
-
Stock trades 29.7% above its 5-year average P/E.
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Operating margin compressed from 19.1% to 15.2% 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)
41.95x
Forward P/E
22.83x
P/B
3.96x
P/S
4.97x
EV/EBITDA
24.54x
PEG ratio
0.43x
Profitability
How much profit each dollar creates
Gross margin
45.3%
Operating margin
15.2%
Net margin
10.6%
ROE
9.5%
ROA
5.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.19x
Current ratio
3.20x
Quick ratio
1.64x
Total debt
$150.20M
Total cash
$49.60M
Growth
How the business has been compounding
Revenue TTM
$614.10M
Revenue 5Y CAGR
-9.1%
EPS TTM
0.88
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$66.10M
Free CF TTM
$81.90M
FCF margin
13.3%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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