Karat Packaging (NASDAQ:KRT) Shares Gap Up on Better-Than-Expected Earnings

Karat Packaging Inc. (NASDAQ:KRT) gapped up before the market opened on Friday following a better than expected earnings announcement. The stock had previously closed at $22.31, but opened at $23.93. Karat Packaging shares last traded at $25.4550, with a volume of 51,427 shares changing hands.

The company reported $0.34 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.28 by $0.06. Karat Packaging had a net margin of 6.67% and a return on equity of 18.98%. The company had revenue of $115.62 million during the quarter, compared to the consensus estimate of $113.95 million.

Karat Packaging Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Friday, February 27th. Shareholders of record on Friday, February 20th were issued a $0.45 dividend. This represents a $1.80 dividend on an annualized basis and a yield of 7.0%. The ex-dividend date of this dividend was Friday, February 20th. Karat Packaging’s dividend payout ratio is presently 120.00%.

More Karat Packaging News

Here are the key news stories impacting Karat Packaging this week:

• Positive Sentiment: Q4 results beat estimates — Revenue of ~$115.6M (up ~13.7% YoY) and EPS of $0.34 topped expectations; operating profit and net income rose year-over-year, supporting profitability improvement. Karat Packaging Reports Fourth Quarter and Full Year 2025 Financial Results
• Positive Sentiment: Company reiterates growth strategy — Management outlined low double-digit sales growth for full-year 2026 and highlighted progress on expanding its paper-bag manufacturing capacity, which supports medium-term revenue upside and sustainability-led demand. Karat Packaging outlines low double-digit sales growth for 2026 while advancing paper bag expansion
• Positive Sentiment: Insider buying noted — Recent small insider purchase (CFO) reported in coverage, which can be read as a modest positive signal of insider conviction. Karat Packaging (KRT) Releases Q4 2025 Earnings: Revenue and EPS Beat; Operating Cash Flow Weakens
• Neutral Sentiment: Earnings call transparency — Full earnings call/transcript is available with management commentary on margin drivers, customer mix and the paper-bag rollout; useful for modeling but contains both supportive and cautionary details. Karat Packaging Inc. (KRT) Q4 2025 Earnings Call Transcript
• Negative Sentiment: Operating cash flow weakened materially — Cash from operations fell ~88% YoY to under $1M; cash and equivalents declined and capex increased, which could pressure liquidity or require higher working capital financing. Karat Packaging (KRT) Releases Q4 2025 Earnings: Revenue and EPS Beat; Operating Cash Flow Weakens
• Negative Sentiment: Q1 2026 revenue guide comes in below consensus — Management gave Q1 revenue guidance roughly $111.9M–$114.0M versus a ~$116.4M consensus, which may temper near-term expectations. Karat Packaging Inc (KRT) Q4 2025 Earnings Call Highlights: Strong Sales Growth Amid Margin …

Analysts Set New Price Targets

Several analysts have recently weighed in on the company. Zacks Research upgraded Karat Packaging from a “strong sell” rating to a “hold” rating in a report on Monday, January 5th. Bank of America set a $24.00 price objective on shares of Karat Packaging and gave the company an “underperform” rating in a report on Friday. Finally, Weiss Ratings reiterated a “hold (c+)” rating on shares of Karat Packaging in a research report on Thursday, January 22nd. Three equities research analysts have rated the stock with a Hold rating and one has given a Sell rating to the stock. According to MarketBeat.com, the stock currently has a consensus rating of “Reduce” and a consensus price target of $27.50.

Institutional Inflows and Outflows

Several large investors have recently bought and sold shares of the stock. Bank of Montreal Can bought a new stake in shares of Karat Packaging in the 4th quarter valued at about $5,216,000. KTF Investments LLC acquired a new stake in shares of Karat Packaging in the fourth quarter valued at about $5,075,000. Polar Asset Management Partners Inc. bought a new position in shares of Karat Packaging during the third quarter worth about $5,039,000. Ranger Investment Management L.P. lifted its stake in shares of Karat Packaging by 105.7% in the second quarter. Ranger Investment Management L.P. now owns 320,556 shares of the company’s stock worth $9,027,000 after acquiring an additional 164,716 shares during the period. Finally, Marshall Wace LLP acquired a new position in shares of Karat Packaging in the second quarter worth approximately $4,312,000. 25.20% of the stock is owned by institutional investors.

Karat Packaging Price Performance

The company has a fifty day moving average of $24.55 and a 200 day moving average of $23.94. The firm has a market capitalization of $517.23 million, a P/E ratio of 17.07, a PEG ratio of 1.27 and a beta of 1.09. The company has a debt-to-equity ratio of 0.14, a current ratio of 2.14 and a quick ratio of 1.09.

Karat Packaging Company Profile

Karat Packaging Technologies, Inc (NASDAQ: KRT) is a U.S.-based provider of premium packaging solutions for consumer goods and industrial products. The company specializes in the design, manufacture and delivery of high-quality litho-laminated folding cartons, tubes and flexible packaging. Karat Packaging operates an integrated production model that combines prepress, printing, converting and finishing capabilities to support the branding and shelf-appeal needs of its customers.

The company serves a diverse range of end markets, including food and beverage, confectionery, health and beauty, pharmaceuticals, specialty chemicals and promotional packaging.