KRT Should I Buy
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Karat Packaging Inc (KRT) is not a strong buy for a beginner investor with a long-term strategy at the moment. The lack of significant positive catalysts, recent downgrade in analyst ratings, and declining financial performance outweigh the attractive dividend yield. Holding off on buying is recommended until the company's financials and sentiment improve.
The MACD histogram is positive but contracting, indicating weakening bullish momentum. RSI is neutral at 56.378, and moving averages are converging, suggesting no clear trend. The stock is trading near its pivot level of 25.337, with resistance at 26.382 and support at 24.293.
The company declared a quarterly dividend of $0.45 per share with a high dividend yield of 7.03%, which may attract income-focused investors.
BofA downgraded the stock to Underperform with a reduced price target of $22, citing concerns. Financial performance in Q3 2025 showed declining net income (-19.45% YoY), EPS (-20% YoY), and gross margin (-10.63% YoY). Technical indicators suggest no strong upward momentum, and stock trend analysis predicts a potential short-term decline.
In Q3 2025, revenue grew by 10.41% YoY to $124.5M, but net income dropped by 19.45% YoY to $7.3M. EPS declined by 20% YoY to 0.36, and gross margin fell by 10.63% to 34.47%. These trends indicate weakening profitability despite revenue growth.
BofA downgraded the stock from Buy to Underperform with a reduced price target of $22, down from $27. This reflects a negative sentiment from analysts.
