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1. Company Snapshot

1.a. Company Description

Kornit Digital Ltd.develops, designs, and markets digital printing solutions for the fashion, apparel, and home decor segments of printed textile industry in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally.The company's solutions include digital printing systems, ink and other consumables, associated software, and value-added services.


Its products and services include direct-to-garment printing platform for smaller industrial operators to mass producers; NeoPigment ink and other consumables; QuickP designer software; and maintenance and support, consulting, and professional services.The company serves decorators, online businesses, brand owners, and contract printers.Kornit Digital Ltd.


was incorporated in 2002 and is headquartered in Rosh HaAyin, Israel.

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1.b. Last Insights on KRNT

Kornit Digital's recent performance was negatively impacted by a Q4 earnings miss, with the company reporting a quarterly earnings of $0.18 per share, missing the Zacks Consensus Estimate of $0.21 per share. This underperformance was a departure from the company's previous growth trajectory, which had been driven by its expanding customer base and increasing adoption of its digital textile printing solutions. The company's revenue growth, although still positive, was slower than expected, with a year-over-year increase of 12.1%.

1.c. Company Highlights

2. Kornit Digital's Transition to Recurring Revenue Model Shows Promise

Kornit Digital reported revenues of $53.1 million for the third quarter of 2025, representing a 5% year-over-year growth, and slightly above the midpoint of their guidance range. The non-GAAP gross margin was 45.8%, down from 50.3% in the same period last year, primarily due to inventory-related adjustments and U.S. tariff costs. Adjusted EBITDA was $1.1 million, with an adjusted EBITDA margin of 2%, reflecting progress towards full-year profitability. Earnings per share (EPS) came in at $0.09, beating analyst estimates of $0.04.

Publication Date: Nov -19

📋 Highlights
  • Revenue Growth:: Q3 revenue reached $53.1M, reflecting 5% YoY growth, exceeding the midpoint of guidance ($52M).
  • EBITDA Margin Progress:: Adjusted EBITDA margin hit 2%, up from prior periods, with full-year 2025 profitability targeted.
  • AIC Model Expansion:: 80% of Apollo systems now under AIC, generating $21.5M in ARR (up $2.6M sequentially), expected to surpass $25M by year-end.
  • 2026 Guidance:: Projects low-single-digit revenue growth but EBITDA margin of 7-10% in Q4 2025, with AIC revenue likely to double by 2026.
  • Market Opportunities:: Targeting 5% share of the $14B global screen printing market by 2030, with footwear decoration (1B pairs annually) as a key growth driver.

Business Model Transition

The company is undergoing a significant transformation, shifting from one-time equipment sales to a recurring usage-based model through its All-Inclusive Click (AIC) model. This transition is expected to strengthen long-term profitability, predictability, and customer lifetime value. As Ronen Samuel noted, the shift towards a more predictable and sustainable business model may lead to lower CapEx sales, but AIC revenue is anticipated to increase significantly, potentially more than doubling.

Growth Prospects

For 2026, Kornit Digital expects modest top-line growth in the low-single digits, with strong growth in annual recurring revenue. The AIC model is seen as the preferred choice for customers, reducing barriers to investment and providing predictability. Geographically, North America represents about 65% of the company's revenue and is expected to continue growing, with opportunities emerging in Asia, particularly in the footwear segment.

Valuation

With a P/E Ratio of -51.66 and an EV/EBITDA of -33.54, the market is pricing in significant growth expectations. The P/S Ratio of 2.79 suggests that the stock is trading at a premium relative to its revenue. However, the company's robust balance sheet, with a quarter-end cash balance of $490 million, and its focus on optimizing operating expenses, provide a solid foundation for future growth.

Outlook

The company's guidance for the fourth quarter expects sequential growth in revenue, gross margin, and EBITDA, with revenues expected to be between $56 million and $60 million. Analysts estimate next year's revenue growth at 2.5%, which is in line with the company's guidance. With a strong pipeline and better visibility on its deals, Kornit Digital is confident about its plan for modest top-line growth and more significant EBITDA growth.

3. NewsRoom

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Kornit Digital: Upgrading On Business Model Transition And More - Buy

Nov -19

Source: seekingalpha.com

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Kornit Digital Announces CFO Transition and New $100 Million Share Repurchase Program

Nov -17

Source: globenewswire.com

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Kornit Digital Ltd. (KRNT) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Kornit Digital (KRNT) Q3 Earnings and Revenues Surpass Estimates

Nov -05

Source: zacks.com

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Kornit Digital Reports Third Quarter 2025 Results

Nov -05

Source: globenewswire.com

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Kornit Digital Launches Breakthrough Footwear Solution at ITMA Asia + CITME Singapore 2025, Bringing Scalable Digital Production to Sports and Athleisure

Oct -27

Source: globenewswire.com

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Kornit Digital Sets Third Quarter 2025 Earnings Release Date and Webcast

Oct -22

Source: globenewswire.com

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Leading UK-Based Digital Textile Print Provider Expands On-Demand Textile Production with Additional Kornit MAX PLUS Systems

Oct -15

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.38%)

6. Segments

Ink and Consumables

Expected Growth: 7%

Kornit Digital's 7% growth in Ink and Consumables is driven by increasing adoption of digital textile printing, rising demand for sustainable and eco-friendly printing solutions, and growing popularity of online shopping and e-commerce, leading to higher volumes of customized apparel and packaging. Additionally, Kornit's expanding customer base and strategic partnerships contribute to the segment's growth.

Systems

Expected Growth: 9%

Kornit Digital's 9% growth is driven by increasing adoption of digital textile printing, rising demand for sustainable and on-demand production, and expansion into new markets such as Asia and Latin America. Additionally, the company's innovative products and partnerships with industry leaders are contributing to its growth momentum.

Service - Spare Parts

Expected Growth: 6%

Kornit Digital's Spare Parts service growth is driven by increasing adoption of digital textile printing, rising demand for customized apparel, and growing need for timely maintenance and repair of Kornit's installed base of printers. Additionally, the shift towards sustainable and on-demand production, as well as the company's expanding global footprint, contribute to the 6% growth rate.

Service Contracts and Software Subscriptions

Expected Growth: 8%

Kornit Digital's 8% growth in Service Contracts and Software Subscriptions is driven by increasing adoption of digital textile printing, growing demand for sustainable and on-demand production, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, customer support, and subscription-based models contribute to the segment's growth.

7. Detailed Products

Atlas

A high-speed, industrial-grade direct-to-garment printer designed for high-volume production

Storm

A high-volume, industrial-grade direct-to-garment printer for high-production environments

Aurora

A high-speed, industrial-grade direct-to-garment printer for high-volume production

Presto

A single-step, industrial-grade direct-to-garment printer for on-demand production

NeoPigment

A sustainable, water-based pigment ink for digital textile printing

Kornit Konnect

A cloud-based software platform for monitoring, managing, and optimizing digital textile printing operations

8. Kornit Digital Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Kornit Digital Ltd. has a moderate threat of substitutes due to the presence of alternative digital printing solutions. However, the company's unique technology and high-quality products help to mitigate this threat.

Bargaining Power Of Customers

Kornit Digital Ltd.'s customers have limited bargaining power due to the company's strong brand reputation and the lack of alternative suppliers for its specialized digital printing solutions.

Bargaining Power Of Suppliers

Kornit Digital Ltd. has a moderate bargaining power of suppliers due to the presence of multiple suppliers for its raw materials and components. However, the company's strong relationships with its suppliers help to mitigate this risk.

Threat Of New Entrants

Kornit Digital Ltd. has a low threat of new entrants due to the high barriers to entry in the digital printing industry, including the need for significant investment in research and development and manufacturing capabilities.

Intensity Of Rivalry

Kornit Digital Ltd. operates in a highly competitive industry with several established players, leading to a high intensity of rivalry. The company must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 2.88%
Debt Cost 3.95%
Equity Weight 97.12%
Equity Cost 13.35%
WACC 13.08%
Leverage 2.97%

11. Quality Control: Kornit Digital Ltd. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ITM Power

A-Score: 4.0/10

Value: 6.8

Growth: 5.8

Quality: 2.7

Yield: 0.0

Momentum: 8.5

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Koenig & Bauer

A-Score: 3.7/10

Value: 6.2

Growth: 2.7

Quality: 1.4

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Waga Energy

A-Score: 3.7/10

Value: 6.4

Growth: 3.6

Quality: 3.2

Yield: 0.0

Momentum: 8.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
LPKF Laser & Electronics

A-Score: 3.0/10

Value: 6.4

Growth: 2.7

Quality: 3.3

Yield: 0.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Nel

A-Score: 2.9/10

Value: 8.0

Growth: 5.6

Quality: 3.1

Yield: 0.0

Momentum: 0.5

Volatility: 0.3

1-Year Total Return ->

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Stock-Card
Kornit Digital

A-Score: 2.6/10

Value: 6.7

Growth: 3.2

Quality: 3.9

Yield: 0.0

Momentum: 1.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.0$

Current Price

14$

Potential

-0.00%

Expected Cash-Flows