Kadant (KAI) Stock Forecast & Price Target

Kadant Inc. demonstrated robust performance in its Material Handling segment, achieving record revenue driven by an 18% increase in capital shipments and an 11% rise in overall revenue to $70.3 million, which contributed to a significant 27% growth in adjusted EBITDA. New order activity also saw a positive trend, increasing 5% to $94 million, indicating strong demand across both aftermarket and capital sectors. Furthermore, gross margins improved by 50 basis points to 45.2%, supported by a notable rise in parts and consumables revenue, which accounted for 69% of total revenue in Q3/25, up from 65% in the previous year.

Kadant Inc. has faced a challenging financial environment, evidenced by an 8% decline in Adjusted EBITDA to $58 million and stagnant year-over-year revenue of $272 million, driven by a 4% decrease in organic revenue. Additionally, the company has reported a notable drop in both operating cash flow, which decreased 10% to $47.3 million, and free cash flow, down 9% to $44.1 million, reflecting pressure on its cash-generating capabilities. Furthermore, a 4% decline in organic bookings, as well as declining demand for aftermarket parts, signals a potential slowdown in key market segments, exacerbating concerns over Kadant's growth prospects.