Kornit Digital Ltd. – Value Analysis (NASDAQ:KRNT) : April 22, 2016

Capitalcube gives Kornit Digital Ltd. a score of 75.

Our analysis is based on comparing Kornit Digital Ltd. with the following peers – Advanced Emissions Solutions, Inc., ARC Document Solutions, Inc., Quad/Graphics, Inc. Class A and De La Rue plc (ADES-US, ARC-US, QUAD-US and DELRF-US).

Investment Outlook

Kornit Digital Ltd. has a fundamental score of 75 and has a relative valuation of OVERVALUED.

Fundamental Score

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Company Overview

  • With respect to peers, relative outperformance over the last year is in contrast to the more recent underperformance.
  • Kornit Digital Ltd. currently trades at a higher Price/Book ratio (3.27) than its peer median (1.06).
  • The market expects faster earnings growth from KRNT-US than from its peers and also a turnaround in its current ROE.
  • KRNT-US has relatively low profit margins and median asset efficiency.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • Over the last five years, KRNT-US‘s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
  • The company’s relatively high gross margin suggests some differentiation with pricing advantages versus peers.
  • Compared with the peers chosen, KRNT-US has had faster revenue growth in prior years and a current P/E ratio that suggests faster growth in the future suggesting superior growth expectations.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • KRNT-US currently does not have any debt.

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Leverage & Liquidity

KRNT-US currently does not have any debt.

  • We consider the company to have a Quick & Able profile as it currently does not have any debt. In comparison, the median level of debt as percent of enterprise value for its peer group is currently 26.45%.
  • All 4 peers for the company have an outstanding debt balance.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
Advanced Emissions Solutions, Inc. 3.3 1.15 -7.23 -285.03
ARC Document Solutions, Inc. 47.53 1.57 5.07 34.43
Quad/Graphics, Inc. Class A 75.63 1.23 2.24 22.52
De La Rue plc 26.45 0.61 16.38 28.29
Kornit Digital Ltd. 0 4.08 40.74 999
Peer Median 26.45 1.23 5.07 28.29
Best In Class 3.3 4.08 40.74 999

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Company Profile

Kornit Digital Ltd. engages in the development, manufacture, and marketing of industrial and commercial printing solutions for the garment, apparel, and textile industries. It offers printing solutions for apparel, polyester, sportswear, beachwear, accessories, paradigm shirt, textiles, curtains, cushions, and couches. The company was founded by Ofer Ben-Zur in 2002 and is headquartered in Rosh HaAyin, Israel.

Disclaimer

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