Kadant Q2 revenue beats expectations, maintains annual revenue, profit guidance

Overview

• Kadant Q2 rev falls 7% yr/yr but beats analyst expectations, per LSEG data

• Adjusted EPS for Q2 beats consensus despite 18% decline, per LSEG data

• Co's bookings rise 7% to $269 mln

Outlook

• Kadant expects 2025 revenue of $1.020 bln to $1.040 bln

• Kadant maintains 2025 adjusted EPS guidance of $9.05 to $9.25

• Kadant sees Q3 2025 revenue of $256 mln to $263 mln

• Company expects stable demand for aftermarket parts to continue

• Co expects "stronger" bookings in the second half of 2025

Result Drivers

• BOOKINGS GROWTH - Co attributes 7% increase in bookings to customer preference for its equipment and technologies, per CEO Jeffrey Powell

• CASH FLOW IMPROVEMENT - Operating cash flow rose 44% and free cash flow increased 58%, indicating efficient operational management

• GROSS MARGIN INCREASE - Gross margin improved by 150 basis points to 45.9%, reflecting better cost management

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Kadant Inc is $327.50, about 5% below its July 28 closing price of $344.02

• The stock recently traded at 35 times the next 12-month earnings vs. a P/E of 33 three months ago

Press Release: ID:nGNXb0lW4C