Karat Expects Gross Margin and EBITDA to Improve in 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 12 2026
0mins
Should l Buy KRT?
Gross margin and adjusted EBITDA margin for full year 2026 expected to continue to improve compared with the prior year, under current global tariff policy. "Our new paper bags product category continues to perform strongly, expanding steadily and generating meaningful revenue growth. In 2025, we won a significant paper bag contract with one of our largest national chain accounts, and we are actively pursuing further opportunities, some of which are at the final confirmation stage. We are also strengthening this category by supplying generic paper bags to smaller customer accounts, and we expect to continue gaining market share in this category in the coming years. In today's dynamic trade environment, we are confident that Karat's proven global sourcing flexibility and efficient logistics capabilities will support a solid growth trajectory," Yu added.
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Analyst Views on KRT
Wall Street analysts forecast KRT stock price to rise
3 Analyst Rating
1 Buy
1 Hold
1 Sell
Hold
Current: 27.920
Low
22.00
Averages
28.50
High
35.00
Current: 27.920
Low
22.00
Averages
28.50
High
35.00
About KRT
Karat Packaging Inc. is a specialty distributor and manufacturer of a range of disposable foodservice products and related items, primarily used by national and regional restaurants and in foodservice settings across the United States. The Company classifies its customers into four categories. Distributors include national and regional distributors across the United States that purchase their products and provide a channel to offer their products to restaurants, offices, schools, government entities and other end users. National and regional chains typically include fast casual, fast-food restaurants and supermarket chains with locations across multiple states to which they supply specified products. Retail primarily includes regional bubble tea shops and frozen yogurt shops that often purchase their specialty beverage ingredients and related items. E-commerce/Online includes small businesses, often with only one or two locations, as well as customers who purchase for personal use.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Significant Sales Growth: Karat Packaging reported a 13.7% year-over-year sales increase in Q4, indicating strong market performance despite an unpredictable macroeconomic environment, with expectations of up to 10% revenue growth in Q1 compared to the prior year, further solidifying its market position.
- Stock Price Surge: Following the sales growth announcement, Karat's stock price soared by 17.9% to $3.99 per share, resulting in a market capitalization of $448 million, reflecting investor confidence in the company's future growth potential.
- Diversified Sourcing Strategy: The company is effectively navigating the evolving tariff landscape by diversifying its sourcing to South America and the U.S., a strategy that not only mitigates operational risks but also supports future growth prospects.
- Demand for Eco-Friendly Products: Karat's eco-friendly packaging offerings are in high demand, and the company continues to innovate with a steady stream of new products, enhancing its appeal in a competitive market, while its nearly 7% dividend yield provides investors with stable returns.
See More
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- Positive Stock Reaction: Following the sales growth announcement, Karat's shares surged by 17.9% as of 1:35 p.m. ET, reflecting investor optimism about the company's future prospects and bolstering market confidence.
- Diversified Supply Chain Strategy: The company is actively expanding its supply chain beyond Asia to include South America and the U.S. to navigate the evolving tariff landscape, a strategy that helps reduce costs and enhance competitiveness.
- Attractive Dividend Yield: Even after the stock price increase, Karat continues to offer a nearly 7% dividend yield, maintaining its appeal among investors, particularly in the current uncertain macroeconomic environment.
See More
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- Growth in Eco-Friendly Products: Sales of eco-friendly products accounted for 37.3% of total revenue in Q4 2025, up from 34.5% in the same quarter of 2024, highlighting the company's expanding market share in sustainable products, which is driving overall revenue growth.
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See More
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