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Kadant Inc. (NYSE:KAI) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of US$239m were in line with what the analysts predicted, Kadant surprised by delivering a statutory profit of US$2.04 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
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Taking into account the latest results, Kadant's four analysts currently expect revenues in 2025 to be US$1.02b, approximately in line with the last 12 months. Statutory earnings per share are expected to shrink 3.3% to US$9.12 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.04b and earnings per share (EPS) of US$9.65 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Check out our latest analysis for Kadant
The average price target fell 5.6% to US$335, with reduced earnings forecasts clearly tied to a lower valuation estimate. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Kadant analyst has a price target of US$380 per share, while the most pessimistic values it at US$275. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Kadant's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.4% by the end of 2025. This indicates a significant reduction from annual growth of 11% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.7% per year. It's pretty clear that Kadant's revenues are expected to perform substantially worse than the wider industry.