Kadant Inc. is a global supplier of high-value, critical components and engineered systems used in process industries worldwide. The Company's products, technologies, and services play an integral role in enhancing process efficiency, optimizing energy utilization, and maximizing productivity in resource-intensive industries. The company was founded in 1991 and is based in Westford, Massachusetts.
KAI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Kadant Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Kadant Inc ranked in the 57th percentile in terms of potential gain offered. More precisely, our analysis suggests the stock is undervalued by approximately 49% on a DCF basis. In terms of the factors that were most noteworthy in this DCF analysis for KAI, they are:
The company's balance sheet shows it gets 80% of its capital from equity, and 20% of its capital from debt. Its equity weight surpasses that of 62.63% of free cash flow generating stocks in the Industrials sector.
Kadant Inc's effective tax rate, as measured by taxes paid relative to net income, is at 17 -- greater than 67.27% of US stocks with positive free cash flow.
Kadant Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at 7.03. This coverage rate is greater than that of 69.29% of stocks we're observing for the purpose of forecasting via discounted cash flows.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
THR, ETN, AZZ, LII, and DAL can be thought of as valuation peers to KAI, in the sense that they are in the Industrials sector and have a similar price forecast based on DCF valuation.
Before we spend countless hours researching a company, we like to analyze what insiders, hedge funds and billionaire investors think of the stock first. This is a necessary first step in our investment process because our research has shown that the elite investors' consensus returns have been exceptional. In the following paragraphs, we find out […]
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