Kornit Digital (KRNT) Losses Deepen for Fifth Year, Challenging Bullish Turnaround Narratives

Kornit Digital (NasdaqGS:KRNT) remains unprofitable this period, with losses having deepened at an average rate of 31.6% per year over the last five years. While revenue is projected to grow by 7.6% per year going forward, this pace lags behind the US market average of 10.5%, and profit margin has failed to show improvement. Shares are trading at $12.50, putting the Price-to-Sales multiple at 2.8x, which is well above peers and the broader machinery industry. Fair value is estimated at $12.13, suggesting sentiment is tempered by ongoing losses and premium valuation multiples.

See our full analysis for Kornit Digital.

The next section puts these numbers up against the prevailing narratives for Kornit Digital, highlighting where consensus may hold and where opinions could shift in light of the latest results.

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Recurring Revenue Model Faces Headwinds

• Kornit’s recurring revenue from its all-inclusive click (AIC) business model and installed base is expected to rise meaningfully in 2025 and 2026, increasing revenue predictability and supporting margin expansion. However, consumable and service revenue declined year-over-year, with ink revenue specifically impacted by customer inventory destocking.
• Analysts' consensus view notes that
  • while recurring revenues are intended to boost gross margin stability through high-margin consumables and services, the year-on-year drop in ink and service sales challenges expectations for a smooth transition to a higher-margin business. This remains a concern, especially if customers continue to manage inventories tightly or substitute alternatives.
  • Customer education and internal execution hurdles are highlighted as factors that could delay stability improvements. As a result, near-term revenue growth remains exposed to variability rather than recurring uplift.
• The earnings update brings fresh evidence for or against the consensus. See how the detailed takeaways stack up in the full narrative. 📊 Read the full Kornit Digital Consensus Narrative.

Margin Compression Still in Focus

• Gross margin dropped to 46.3% from 48.6% last year, reflecting softer consumable and upgrade sales and persisting negative adjusted EBITDA margins.
• Analysts' consensus view emphasizes that
  • the continued margin erosion supports cautious outlooks, given that expected progress on recurring revenues has yet to offset the drag from weak consumable trends and rising customer concentration.
  • Ongoing digital adoption and sustainability benefits may underpin longer-term improvement. For now, negative profitability and margin compression take precedence over growth themes in investor assessments.

Premium Valuation Despite Ongoing Losses

• Kornit’s shares trade at 2.8x Price-to-Sales, a premium to both peers at 0.7x and the US machinery industry average of 1.9x. The current price of $12.50 sits slightly above the DCF fair value of $12.13.
• Analysts' consensus view highlights that
  • this premium valuation is difficult to justify given slower than average revenue growth (7.6% versus the US market’s 10.5%) and no forecasted profitability in the next three years. This makes the fundamental risk profile of Kornit heavier than seen at most peers or sector averages.
  • The consensus price target is 23.08, representing an 84.6% upside to the current share price if growth and margin assumptions are met, but only if near-term headwinds are resolved.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Kornit Digital on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Kornit Digital research is our analysis highlighting 2 important warning signs that could impact your investment decision.

See What Else Is Out There

Kornit Digital continues to struggle with deepening losses, margin compression, and a valuation premium that is difficult to justify without clear profit momentum.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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