Kornit Digital (NasdaqGS:KRNT) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Kornit Digital Ltd. (NasdaqGS:KRNT) is scheduled to report Q3 earnings results after markets close for trading on November 10, 2020.

The company is expected to report earnings of $0.14/share on revenue of $55.285 million. The consensus earnings per share (EPS) of $0.14/share is based on a poll of 7 analysts and represents a growth in eps of 50.2% over the same quarter last year, when the company reported earnings of $0.09/share.

The revenue forecast of $55.285 million based on a poll of 5 analysts implies a year-over-year (YoY) growth in revenue of 24.0%. Last year the company reported $44.58 million in revenue for the quarter.

Expected to report EPS growth of 50.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $55.29 $44.58 24.0%
EPS $0.14 $0.09 50.2%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 8 tracked quarters, and missed expectations 6 quarters.

What are your expectations from Kornit Digital Ltd. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.07 -$0.03 54.8% Beat
Q1, 2020 -$0.11 -$0.22 -106.2% Missed
Q4, 2019 $0.18 $0.17 −4.2% Missed
Q3, 2019 $0.18 $0.09 −50.4% Missed
Q2, 2019 $0.13 $0.08 −38.0% Missed
Q1, 2019 $0.06 $0.03 −53.5% Missed
Q4, 2018 $0.12 $0.08 −34.3% Missed
Q3, 2018 $0.11 $0.13 16.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 7.6%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 11, 2020 $53.71 $57.79 7.6% Increase
May 19, 2020 $35.42 $47.74 34.8% Increase
February 11, 2020 $43.84 $44.55 1.6% Increase
November 18, 2019 $34.22 $32.48 −5.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.02, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.02 implies a 2.1% chance of earnings manipulation.

Fundamentals And Technical Analysis

Kornit Digital Ltd. is currently trading at $68.45/share, down −4.1% for the day. The company is trading at approximately 94.1% of its 52-week high of $73.18/share. The company’s stock price is up 18.4% since the last earnings report and up 3.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 66.85 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:KRNT Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −574.53 and a forward P/E multiple of 1,175.97.

Kornit Digital Ltd.’s current share price also implies a price-to-book (P/B) multiple of 8.94. The following table summarizes some other key fundamental ratios:

Data as of November 9, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $68.45
P/E Ratio −574.5x
P/E Ratio (Fwd) 1,176.0x
PEG Ratio 4.2
Total Debt / Total Capital 0.7%
Levered Free Cash Flow -$19.355 million
EV / EBITDA −423.3x

Finbox

Kornit Digital Ltd. is a mid-cap stock with a market capitalization of $3.11 billion and a total enterprise value of $2.896 billion. The company operates in the Industrials sector and the Machinery industry.

Kornit Digital Ltd. develops, designs, and markets digital printing solutions for the fashion, apparel, and home decor segments of printed textile industry worldwide. The company’s solutions include digital printing systems, ink and other consumables, associated software, and value added services. It products and services include direct-to-garment printing systems from smaller industrial operators to mass producers; NeoPigment ink and other consumables; QuickP designer software; and maintenance and support, and professional services. The company serves decorators, online businesses, brand owners, and contract printers. Kornit Digital Ltd. was founded in 2002 and is headquartered in Rosh-Ha`Ayin, Israel.

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