Kadant (KAI) Stock Forecast & Price Target

Kadant Inc. has demonstrated robust growth in its Material Handling segment, achieving record revenue performance with an 18% increase in capital shipments in Q3/25, complemented by a 5.5% rise in bookings to $93.8 million. The company also reported a notable 50 basis point improvement in gross margin to 45.2%, primarily driven by a 400 basis point increase in parts and consumable revenue, which now represents 69% of total revenue. Furthermore, the continued demand for aftermarket and capital solutions led to a 5% increase in new order activity, underpinning a 27% rise in adjusted EBITDA to $16.8 million, signaling a positive outlook for Kadant's financial performance.

Kadant Inc. has experienced a decline in key financial metrics, with adjusted EBITDA falling 8% to $58 million and operating cash flow decreasing 10% to $47.3 million, indicating potential inefficiencies and reduced profitability. Revenue remained flat year-over-year at $272 million; however, organic revenue decreased by 4%, highlighting a decline in underlying business performance despite acquisition and favorable foreign exchange influences. Additionally, a 4% decline in bookings, driven by softer demand for aftermarket parts, further underscores the challenges facing the company and raises concerns about future growth prospects.