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1. Company Snapshot

1.a. Company Description

Knife River Corporation provides aggregates-based construction materials and contracting services in the United States.It operates through six segments: Pacific, Northwest, Mountain, North Central, South, and Energy Services.The company mines, processes, and sells construction aggregates, including crushed stone and sand, and gravel; and produces and sells asphalt and ready-mix concrete, as well as provides contracting services to support the aggregate-based product lines, including heavy-civil construction, asphalt and concrete paving, and site development and grading.


It serves federal, state, and municipal governments for various projects, such as highways, bridges, airports, schools, public buildings, and other public-infrastructure projects.The company was founded in 1917 and is based in Bismarck, North Dakota.

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1.b. Last Insights on KNF

Knife River Corporation faces near-term challenges, including declining volumes, regional funding cuts, and weather-related disruptions. Despite this, the company benefits from rising prices and recent acquisitions. Profitability has been impacted by higher costs and debt. However, institutional investors such as Sequoia Financial Advisors LLC and Asset Management One Co. Ltd. have shown confidence in the company, with the former purchasing a new stake and the latter increasing its position by 25%. The company's Q3 earnings beat estimates, with EPS of $2.52. (Source: Zacks Consensus Estimate)

1.c. Company Highlights

2. Knife River's Q3 Earnings: A Strong Performance

Knife River Corporation reported record financial results for the third quarter of 2025, with revenue of $1.2 billion and adjusted EBITDA of $273 million. The company's earnings per share (EPS) came in at $2.52, beating analyst estimates of $2.45. The strong financial performance was attributed to the successful implementation of the company's competitive EDGE strategy, which includes acquisition growth, process improvement, and dynamic pricing.

Publication Date: Nov -08

📋 Highlights
  • Record Q3 Financials:: Revenue reached $1.2 billion, adjusted EBITDA hit $273 million, driven by acquisitions, cost control, and the EDGE strategy.
  • Energy Services Growth:: Revenue surged 34%, EBITDA rose 18% due to Albina Asphalt acquisition and new polymer plant in South Dakota.
  • Backlog Expansion:: Central segment backlog for asphalt paving grew 83% YoY, Mountain segment backlog increased 23%, signaling strong future demand.
  • 2025 Guidance:: Revenue narrowed to $3.1–$3.15 billion, adjusted EBITDA to $475–$500 million, reflecting operational confidence and market stability.
  • Strategic Positioning:: Oregon’s $4.3 billion 10-year transportation bill and Strata integration (contributing $45M EBITDA target) underpin long-term growth and margin stability.

Segment Performance

The company's segment performance was mixed, with the Oregon segment showing year-over-year improvements driven by market stabilization, team right-sizing, and crew repositioning. The Mountain segment was impacted by less asphalt paving due to project timing and weather-related delays, while the West segment saw healthy demand and strong execution. The Energy Services segment delivered a strong quarter, with revenue up 34% and EBITDA up 18%.

Financial Guidance and Outlook

Knife River's financial guidance for the full year 2025 has been narrowed to consolidated revenue between $3.1 billion and $3.15 billion, and adjusted EBITDA between $475 million and $500 million. The company is confident in its ability to deliver long-term value to shareholders, citing its track record of meeting goals and the success of its EDGE strategy. For 2026, the company anticipates results in Oregon to be similar to this year, with a continuation of market stabilization and execution of its EDGE strategy.

Valuation and Growth Prospects

With a P/E Ratio of 27.08 and an EV/EBITDA ratio of 11.44, the market is pricing in a certain level of growth for Knife River Corporation. Analysts estimate next year's revenue growth at 5.5%. The company's strong financial performance and confidence in its ability to deliver long-term value to shareholders suggest that it is well-positioned to achieve its growth objectives. As Brian Gray, President and CEO, noted, "We're pleased with the management's reaction to the new level of work, repositioning crews, and quickly rightsizing."

Conclusion on Financial Health

The company's balance sheet remains strong, with a net leverage position of 2.6x and $457 million of borrowing capacity on the revolver. The company's return on equity (ROE) is 9.97%, and its return on invested capital (ROIC) is 6.0%. With a healthy financial position and a robust pipeline of corporate development opportunities, Knife River Corporation is well-positioned for future growth.

3. NewsRoom

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Edgestream Partners L.P. Invests $5.94 Million in Knife River Corporation $KNF

Dec -03

Source: defenseworld.net

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Knife River (NYSE:KNF) & Owens Corning (NYSE:OC) Head-To-Head Review

Dec -01

Source: defenseworld.net

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Boston Partners Raises Stock Holdings in Knife River Corporation $KNF

Nov -28

Source: defenseworld.net

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Comparing Knife River (NYSE:KNF) & Arcosa (NYSE:ACA)

Nov -22

Source: defenseworld.net

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Knife River Corporation (KNF) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

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Knife River (KNF) Q3 Earnings and Revenues Surpass Estimates

Nov -04

Source: zacks.com

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Knife River (KNF) Projected to Post Quarterly Earnings on Monday

Nov -01

Source: defenseworld.net

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Asset Management One Co. Ltd. Increases Position in Knife River Corporation $KNF

Oct -29

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.89%)

6. Segments

Central

Expected Growth: 3.8%

Central segment of Knife River Corporation, with 3.8% growth, is driven by increasing demand for construction materials, strategic acquisitions, and expansion into new markets. Additionally, cost savings initiatives, operational efficiencies, and a strong backlog of projects contribute to the segment's growth.

Northwest

Expected Growth: 3.9%

Northwest segment's 3.9% growth is driven by increasing infrastructure spending, robust highway construction, and rising demand for construction materials. Additionally, Knife River Corporation's strategic acquisitions and operational efficiencies have contributed to the segment's growth.

Mountain

Expected Growth: 3.7%

Mountain segment of Knife River Corporation, with 3.7% growth, is driven by increasing demand for aggregates in infrastructure projects, expansion into new markets, and strategic acquisitions. Additionally, growing construction activities in the Western United States, where the company has a strong presence, contribute to the segment's growth.

Pacific

Expected Growth: 4.1%

Pacific segment of Knife River Corporation's 4.1% growth is driven by increasing demand for construction materials, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on operational efficiency, cost savings, and investments in technology have contributed to its growth. Strong backlog and bidding activity also support future growth prospects.

Energy Services

Expected Growth: 4.3%

Knife River Corporation's Energy Services segment growth of 4.3% is driven by increasing demand for infrastructure development, expansion of renewable energy sources, and rising investments in oil and gas exploration. Additionally, the company's strategic acquisitions and focus on operational efficiency have contributed to its growth momentum.

Corporate Services

Expected Growth: 3.6%

Knife River Corporation's Corporate Services segment growth of 3.6% is driven by increasing demand for infrastructure development, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on operational efficiency, cost savings, and investments in technology have contributed to the segment's growth.

7. Detailed Products

Aggregates

Knife River Corporation provides a wide range of aggregates including sand, gravel, and crushed stone for construction, landscaping, and other applications.

Asphalt

Knife River Corporation offers high-quality asphalt products for paving, patching, and repairing roads, highways, and parking lots.

Ready Mix Concrete

Knife River Corporation provides ready mix concrete for building foundations, walls, floors, and other structures.

Cement

Knife River Corporation offers high-quality cement products for construction, building, and infrastructure development.

Construction Services

Knife River Corporation provides construction services including excavation, grading, and paving for commercial and residential projects.

8. Knife River Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Knife River Corporation is moderate, as there are some alternative materials and products available in the market, but they are not highly attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Knife River Corporation is low, as the company operates in a niche market with limited customer base, and customers have limited bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Knife River Corporation is moderate, as the company relies on a few key suppliers for raw materials, but has some flexibility to switch suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Knife River Corporation is low, as the company operates in a niche market with high barriers to entry, and new entrants would face significant challenges in competing with the company.

Intensity Of Rivalry

The intensity of rivalry for Knife River Corporation is high, as the company operates in a competitive market with several established players, and the company needs to continuously innovate and improve its products and services to stay competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 35.43%
Debt Cost 10.36%
Equity Weight 64.57%
Equity Cost 10.36%
WACC 10.36%
Leverage 54.87%

11. Quality Control: Knife River Corporation passed 6 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

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Reliance Steel & Aluminum

A-Score: 5.3/10

Value: 4.6

Growth: 6.1

Quality: 5.6

Yield: 3.0

Momentum: 4.0

Volatility: 8.7

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Boise Cascade

A-Score: 5.1/10

Value: 6.8

Growth: 5.8

Quality: 5.6

Yield: 6.0

Momentum: 0.5

Volatility: 6.0

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Summit Materials

A-Score: 4.5/10

Value: 1.9

Growth: 5.6

Quality: 4.0

Yield: 1.0

Momentum: 8.0

Volatility: 6.3

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CMC

A-Score: 4.4/10

Value: 3.9

Growth: 3.8

Quality: 4.5

Yield: 2.0

Momentum: 6.0

Volatility: 6.3

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Eagle Materials

A-Score: 4.3/10

Value: 3.7

Growth: 7.6

Quality: 6.1

Yield: 0.0

Momentum: 2.0

Volatility: 6.7

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Knife River

A-Score: 3.4/10

Value: 6.1

Growth: 5.2

Quality: 3.9

Yield: 0.0

Momentum: 2.0

Volatility: 3.3

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

74.94$

Current Price

74.94$

Potential

-0.00%

Expected Cash-Flows