KRNT: Rising Recurring Revenue Momentum Will Drive Long-Term Cash Flow Durability

Analysts have reduced their price target for Kornit Digital from approximately $23.92 to $21.58. They cite moderating revenue growth expectations and a slightly lower profit margin, despite recent positive earnings momentum and improved recurring revenues.

Analyst Commentary

Recent analyst updates reflect both optimism and caution regarding Kornit Digital's outlook. The assessments incorporate the company's latest quarterly performance, as well as changes in price targets and ratings.

Bullish Takeaways

• Bullish analysts highlight growth in both products and services, indicating diversified expansion across the business lines.
• There is encouraging momentum in annual recurring revenue, suggesting improved stability and predictability of future cash flows.
• Recent earnings demonstrated a positive adjusted EBITDA margin of 2.1 percent, which exceeded consensus expectations and points to operational efficiency gains.
• Quarterly revenues increased 5 percent year-over-year, outperforming Street expectations and reflecting resilient demand despite a challenging macroeconomic environment.

Bearish Takeaways

• Several bearish analysts have lowered price targets, signaling tempered expectations around valuation and future growth upside.
• One firm downgraded the stock rating, emphasizing concerns about Kornit Digital's ability to sustain previous momentum amid intensifying competition.
• Some caution that while topline improvements are evident, profitability remains modest, with profit margins vulnerable to market pressures.
• Ongoing moderation in revenue growth expectations may limit significant appreciation in share value over the near term.

What's in the News

• Kornit Digital provided earnings guidance for Q4 2025 and projects revenues between $56 million and $60 million (Corporate Guidance).
• The company will showcase major innovations at ITMA Asia + CITME Singapore 2025, including a digital footwear solution, an All-Inclusive Click business model for Asia, and advanced Presto MAX technology for mass fashion production (Product-Related Announcements).
• UK-based Snuggle expanded its investment in the Kornit Atlas MAX PLUS platform to meet rising demand and is now producing over 24,000 pieces daily with enhanced print quality (Client Announcements).
• Printeez Inc., a leading custom apparel provider in Quebec, increased its adoption of Kornit Atlas MAX POLY systems and is accelerating the shift from traditional screen printing to digital, on-demand production (Client Announcements).
• Promos Ink in Dallas is transitioning from 60 analog systems to Kornit digital platforms, including the Apollo, to deliver faster and higher quality custom prints at scale (Client Announcements).

Valuation Changes

• Consensus Analyst Price Target has decreased from $23.92 to $21.58, reflecting more conservative growth and profit expectations.
• Discount Rate has risen slightly from 10.02 percent to 10.51 percent. This indicates a modest increase in perceived investment risk.
• Revenue Growth expectations have fallen significantly from 6.79 percent to 3.21 percent, pointing to a more cautious outlook on sales expansion.
• Net Profit Margin is projected to decline from 9.87 percent to 9.27 percent, suggesting pressure on overall profitability.
• Future P/E ratio is expected to rise from 48.47x to 50.34x. This implies higher valuation multiples relative to earnings given lowered growth forecasts.