Karat Packaging is a high-return (31% ROE) packaging business with accelerating revenue and a 3-of-4 earnings beat streak, but the shares trade 25.4% above the analyst target at a forward P/E of 22.7x, which leaves a poor reward-to-risk.
Thesis pillars
- High Returns Strong Piotroski→Stable
- Accelerating Revenue Growth→Stable
- Large August Earnings Beat→Stable
- +2 more pillars — see the Why tab for full reasoning
Pillars as of Oct 24, 2026, based on the 10-K filed Mar 13, 2026
Karat Packaging Inc. (KRT) Stock Analysis
Consumer Cyclical · Packaging & Containers
Sell if holding. Analyst target reached at $53.40 — A.R:R is negative (-4.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Near 52-week high (4.7% away).
Karat Packaging is a distributor and manufacturer of disposable foodservice products -- containers, cups, cutlery, bags and related items -- sold in plastic, paper and compostable forms to restaurant chains, distributors, retailers and online customers across the United States.... Read more
Sell if holding. Analyst target reached at $53.40 — A.R:R is negative (-4.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Near 52-week high (4.7% away). Chart setup: No clear chart pattern; technical signals are mixed. Score 5.9/10, moderate confidence.
Passes 6/9 gates (positive momentum, clean insider activity, no SEC red flags, news events none recent, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio and earnings proximity 7d<=7d. Suitability: aggressive.
About Karat Packaging Inc.
About Karat Packaging Inc.
Karat Packaging distributes and manufactures disposable foodservice products -- food and take-out containers, bags, cups, cutlery and specialty beverage ingredients -- through three channels: national chains and distributors, retail, and e-commerce, serving customers including Chipotle, Panda Express and In-N-Out Burger. Chains-and-distributors revenue reached $370.6 million in 2025, while eco-friendly products grew to 34.1% of total sales, up from 33.6% in 2024, and no single customer represented more than 10% of revenue.
Karat sources nearly all its non-manufactured products from roughly 150 active global vendors, with Taiwan supplying about 50% of global sourcing in 2025 and China 15%, down from 22% in 2024, as the company diversified into Malaysia and Vietnam -- which together grew to approximately 17% of sourcing from 9% -- to mitigate tariff exposure. Domestic manufacturing across California, Texas and Hawaii facilities, dedicated partly to production, generated about 9% of 2025 revenue, down from 11% in 2024, as Karat pivots toward a more asset-light distribution model. The company operates ten distribution centers, including newly opened facilities in Chino, California and Mesa, Arizona, supported by an owned fleet of 40 trucks, 46 trailers and 41 drivers, reducing reliance on third-party logistics providers.
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Karat's supply chain carries meaningful country concentration even after its 2025 diversification push: Taiwan alone still accounted for roughly half of global sourcing, more than three times China's 15% share, meaning renewed tariffs or trade friction specific to Taiwan would have an outsized impact relative to the China exposure the company has actively been reducing. The 10-K notes the company does not enter into long-term fixed-price contracts with suppliers, so raw material and freight cost increases can pass through with a lag before Karat can adjust its own selling prices.
See also: Consumer Cyclical · Packaging & Containers
From Karat Packaging Inc.'s most recent 10-K filing, extracted July 6, 2026.
Recent developments
updated 2026-10-29Recent Developments — Karat Packaging Inc.
Latest news
- NEWS KRT|Karat Packaging Inc|Price:40.310|Chg%:-0.280 - TradingKey — TradingKey neutral
- NEWS Karat Packaging (NASDAQ:KRT) Hits New 52-Week High - Should You Buy? - MarketBeat — MarketBeat positive
- NEWS Karat Packaging (NASDAQ:KRT) Hits New 52-Week High - Should You Buy? - marketbeat.com — marketbeat.com positive
- NEWS Karat Packaging Raises Dividend to 47c >KRT - Moomoo — Moomoo positive
- NEWS Karat Packaging Board Increases Quarterly Cash Dividend - The Manila Times — The Manila Times positive
Generated 2026-10-29T11:48:40Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Concentration Risks(10-K Item 1A)
- MEDIUMSupplierTaiwan50%10-K Item 1: 'maintained purchases from Taiwan at approximately 50% of our global sourcing'
- LOWSupplierChina15%10-K Item 1: 'we have strategically and swiftly realigned our global supply chain during 2025. We reduced purchases from China from approximately 22% of global sourcing during 2024 to approximately 15% in 2025'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
10 dimensions · all in-band
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Analyst target reached at $53.40 — A.R:R is negative (-4.7) — price has exceeded the analyst target. Reward from here is too thin for a buy — the engine flags exit. Additional concerns: Near 52-week high (4.7% away). Chart setup: No clear chart pattern; technical signals are mixed. Prior stop was $50.42. Score 5.9/10, moderate confidence.
Analyst target $39.52 reached (−26.0% from $53.40); no take-profit level is published. Prior stop was $50.42. Stop-loss: $50.42.
Analyst target reached - limited upside remaining; Near 52-week high (4.7% away); Sector modifier (Consumer Cyclical): -1.5.
Karat Packaging Inc. trades at a P/E of 21.4 (forward 22.9). TrendMatrix value score: 4.7/10. Verdict: Sell.
7 analysts cover KRT with a consensus score of 3.9/5. Average price target: $47.
What does Karat Packaging Inc. do?Karat Packaging is a distributor and manufacturer of disposable foodservice products -- containers, cups, cutlery, bags...
Karat Packaging is a distributor and manufacturer of disposable foodservice products -- containers, cups, cutlery, bags and related items -- sold in plastic, paper and compostable forms to restaurant chains, distributors, retailers and online customers across the United States. The company sources from a diversified global network of nearly 150 vendors, with Taiwan supplying approximately 50% of global sourcing and China 15% in 2025, complemented by domestic manufacturing that made up about 9% of net sales.