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what it is
Karat sells disposable cups, containers, cutlery, and related supplies to restaurants and food sellers.
how it gets paid
Last year Karat Packaging made $468M in revenue. Food containers and bowls was the main engine at $170M, or 36% of sales.
why it's growing
Revenue grew 10.7% last year. Quarterly revenue hit $352M, and that matters because the business still grew while gross margin held at 37.7%.
what just happened
Karat posted $352M in quarterly revenue, with EPS at $1.22 and gross margin at 37.7%.
At a glance
B balance sheet — gets the job done, barely
16.5x trailing p/e — the market's not buying it — or you found a deal
6.7% dividend yield — cash in your pocket every quarter
15.3% return on capital — nothing to write home about
$1.49 fy2024 eps est
xvary composite: 47/100 — below average
What they do
Karat sells disposable cups, containers, cutlery, and related supplies to restaurants and food sellers.
Karat sells the stuff restaurants burn through every day. With 683 employees and $468M in last 12 months sales, each employee supports about $685k of sales. You do not buy this once. Your cups, lids, and containers disappear, and the reorder shows up before the trash does.
How they make money
$468M
annual revenue · their business grew +10.7% last year
Food containers and bowls
$170M
Cups and lids
$125M
Tableware and cutlery
$78M
Biopolymer and compostable products
$55M
Custom solutions and specialty distribution
$40M
The products that matter
restaurant carryout packaging
Food Containers & Tableware
$280M · ~60% of mix shown
This is the core category at $280M in the segment data shown here. If restaurant traffic and takeout demand hold up, this line does most of the lifting.
core revenue
drinkware and attachments
Cups & Lids
$140M · +15%
At $140M, this is the second-biggest category and the fastest grower shown on the page. That matters because the full business only grew 4.2% last year.
growth pocket
smaller packaging categories
Other Disposables
$48M · +5%
This $48M bucket is smaller, but it keeps the story from being one category and a prayer. You want breadth in a commodity-heavy business.
supporting mix
Key numbers
$468M
last 12 months sales
This is the size of the machine. More cups, lids, and containers means more repeat orders.
13.9%
operating margin
For every $100 of sales, $13.90 stayed after operating costs.
15.3%
return on capital
For every dollar tied up in the business, Karat earned 15.3 cents in operating profit.
6.7%
dividend yield
If the dividend holds, you collect 6.7% a year while you wait.
Financial health
B
strength
- balance sheet grade B — adequate — nothing special
- risk rank 3 — safer than 50% of stocks
- price stability 35 / 100
- long-term debt $58M (10% of capital)
B — functional but not a standout on the balance sheet.
Total return vs. market
Return history isn't available for KRT right now.
source: institutional data · return history unavailable
What just happened
beat estimates
Karat posted $352M in quarterly revenue, with EPS at $1.22 and gross margin at 37.7%.
Sales rose 183% from a year ago. The business also kept gross margin above 37%, which says the mix is still working.
$352M
revenue
$1.22
eps
37.7%
gross margin
the number that mattered
Quarterly revenue hit $352M, and that matters because the business still grew while gross margin held at 37.7%.
source: company earnings report, 2026
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What could go wrong
KRT's risk profile is specific, not theoretical: the company just showed you revenue growth to $115.6M and a gross margin drop to 34.0% in the same quarter. If that pattern sticks, the stock's value case gets thinner fast.
high
Tariff margin compression
Gross margin fell from 36.8% to 34.0% in Q4 2025. That is the cost story showing up in plain sight.
If gross margin keeps moving the wrong way, revenue growth will not rescue the equity story. What would change our mind: margin stabilizing while sales stay firm.
med
Dividend strain
The 6.7% yield looks generous, but the page also shows $32.7M in annual net income. That is not a wide cushion.
If margins stay weaker, management has two bad options: protect the payout and narrow flexibility, or cut the payout and hit the income thesis.
med
Commodity-style pricing
The company sells products customers need, but not products customers romanticize. When cost moves, buyers notice price quickly.
That makes pass-through harder. The latest quarter already hinted at the problem: higher sales did not protect the margin line.
low
Growth proving temporary
The latest quarter grew 13.7%, while the full-year figure on this page is 4.2%. That is a useful gap, not proof of a new normal.
If growth drifts back toward the full-year pace before margins recover, the stock's 16.5x multiple will stop looking modest.
The business is not broken. The cushion is just thinner than the yield and valuation might first suggest. That's why the next margin print matters more than the next sales headline.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
Gross margin on the next print
34.0% is the number on the screen right now. If it stops falling while revenue stays healthy, you have the beginnings of a cleaner bull case.
calendar
Next quarterly report
One quarter can be noise. Two quarters start to look like a pattern. You want another read on sales growth versus tariff pressure before trusting the turn.
risk
Dividend coverage
A 6.7% yield backed by $32.7M in net income is attractive and tight at the same time. That is the lens to use.
trend
Whether 13.7% revenue growth holds
The latest quarter ran much hotter than the 4.2% annual figure. If that gap closes the wrong way, the stock will feel less cheap in a hurry.
Analyst rankings
street coverage
thin
No standardized analyst rank is shown in this snapshot. in human-speak, this is a lightly covered small cap, so you should expect less consensus and more volatility around each report.
forecast visibility
limited
The page gives you one forecast reference and no published price-target spread. Translation: quarterly numbers matter more here than broker models.
what that means
read results
When coverage is thin, the filing does more of the talking. For KRT, the first lines to read are revenue growth, gross margin, and anything that changes the dividend math.
source: institutional data
Institutional activity
institutional ownership data for KRT is being compiled.
source: institutional data
Price targets
3-5 year target range
n/a
n/a
$25
current price
n/a
target midpoint · n/a from current
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