GET DAILY SIGNALSKarat Packaging (KRT) Drops -34.7% in a Month After Earnings Miss and Margin Squeeze
Key Takeaways
- Karat Packaging shares fell roughly 34.7% over the last 30 days, from a close of about $53.60 in mid-October to near $35.01, driven by a disappointing third-quarter earnings report.
- The company missed Wall Street's revenue and earnings expectations, with adjusted EPS of $0.24 falling well short of the roughly $0.46 consensus estimate.
- Rising resin, ocean freight, and domestic shipping costs compressed gross margin to 33.5% and pushed operating margin down to 3.6%.
- E-commerce remained a bright spot, with online sales up 37.7% year over year, though the fastest-growing channel also carried elevated fulfillment costs.
- Management announced price increases of 3% to 13% effective January 2027 to offset persistent cost inflation and supply chain disruption.
- For additional detail, explore Price Targets, Earnings, and Forecast pages on Karat Packaging.
- Investors can also monitor automated strategies trading this name through Trending AI Robots.
Karat Packaging (KRT) Business Snapshot
Karat Packaging Inc. (KRT) distributes and manufactures single-use foodservice items such as disposable cups, lids, containers, and cutlery, along with eco-friendly options made from bagasse and paper. Based in Chino, California, it supplies restaurants, chains, distributors, and an expanding e-commerce audience nationwide. The company operates with vertical integration, its own distribution network, and sourcing across Taiwan, China, Vietnam, Malaysia, Indonesia, and South America. I follow KRT for its foodservice exposure, sustainability focus, regional growth plans, and steady dividend history. I also checked this using Tickeron’s AI Screener to see how the stock compares to others in the industry.
KRT Stock Moves Over the Past 30 Days and Quarter
Over the last 30 days, KRT shares declined approximately 34.7%, sliding from a close near $53.60 in mid-October to roughly $35.01. Most of the drop came in one session after the third-quarter report, when the stock fell from a prior close of $51.44 to around $33.54 on heavy volume. The quarterly view shows a similar reversal: shares rose steadily through September and October to an intraday high near $56 before the earnings reaction wiped out much of that advance. The 52-week range runs from a low near $21 to an intraday high near $56, highlighting the volatility tied to the latest release.
What Pushed KRT Lower in Recent Weeks
The main trigger was Karat Packaging’s third-quarter 2026 results, released after the close in early November. Revenue climbed 8.2% year over year to $134.7 million yet missed the consensus estimate of roughly $140.3 million. Adjusted EPS of $0.24 fell well below the consensus of about $0.46, and adjusted EBITDA of $8.9 million lagged the roughly $13.9 million analysts expected. Profitability took the biggest hit as gross margin slipped to 33.5% from 34.5% a year earlier and operating margin fell to 3.6% from 6.6%. Higher resin prices, a 17% jump in average ocean container rates, and rising domestic delivery costs tied to diesel prices were the key factors. Fourth-quarter revenue guidance around $127.2 million at the midpoint also came in light of expectations near $131.4 million. One-time tariff refunds had supported first-half results, so the third-quarter numbers revealed a tighter underlying margin picture.
Quarterly Narrative Shift for KRT
Earlier in the quarter, momentum looked solid with e-commerce strength and new national chain wins, and management had pointed toward low-double-digit full-year sales growth. Online sales rose 37.7% year over year, while East Coast and Midwest sales grew 19% and 22%. That demand was offset by raw-material, freight, and fuel inflation. Shipping capacity shortages led to some shorted orders, prompting price increases in October and November plus further hikes set for January 2027. Structural moves, including a new Orlando distribution center and broader sourcing from Indonesia, Malaysia, and South America, are underway but have not yet eased near-term margin pressure.
Key Items to Watch Going Forward
Attention will center on whether the planned 3% to 13% price increases starting January 2027 can rebuild margins without hurting demand. Progress on new chain accounts, the Orlando center ramp, and continued e-commerce growth will serve as important operational markers. Resin and oil prices, ocean freight rates, and supply-chain conditions in Asia remain key variables. Management guided to fourth-quarter and full-year 2026 sales growth of 9% to 11%, and investors will track whether those targets hold alongside updates on cost recovery and sourcing changes. Actual results could differ from expectations.
Using Tickeron Tools in My Research
When analyzing names like this, I often turn to Tickeron’s AI Trading Bots to see how automated strategies have handled similar volatility and cost pressures. The platform offers a range of data-driven approaches across different timeframes, which helps put current price action in context without replacing my own fundamental work.
Disclaimer
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KRT in downward trend: 10-day moving average crossed below 50-day moving average on November 06, 2026
The 10-day moving average for KRT crossed bearishly below the 50-day moving average on November 06, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 11 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 73%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on November 02, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on KRT as a result. In 68 of 93 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 73%.
KRT moved below its 50-day moving average on November 05, 2026 date and that indicates a change from an upward trend to a downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KRT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 63%.
The Aroon Indicator for KRT entered a downward trend on November 13, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an Uptrend is expected.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 8 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +12.67% 3-day Advance, the price is estimated to grow further. Considering data from situations where KRT advanced for three days, in 260 of 341 cases, the price rose further within the following month. The odds of a continued upward trend are 76%.
KRT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Fundamental Analysis (Ratings)
The Tickeron SMR rating for this company is 33 (best 1 - 100 worst), indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is 55 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock slightly better than average.
The Tickeron Valuation Rating of 56 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (3.893) is normal, around the industry mean (1.266). P/E Ratio (13.363) is within average values for comparable stocks, (16.239). Projected Growth (PEG Ratio) (0.020) is also within normal values, averaging (1.023). KRT has a moderately high Dividend Yield (0.056) as compared to the industry average of (0.033). P/S Ratio (2.026) is also within normal values, averaging (1.259).
The Tickeron PE Growth Rating for this company is 58 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 60 (best 1 - 100 worst), indicating fairly steady price growth. KRT’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
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