Value
3.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 3.5 |
| EV/EBITDA | 1.2 |
| Fwd P/E | 5.4 |
| PEG | 3.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 23.6x
- ▸PEG: 4.20
KAI · Why this verdict
Why Kadant (KAI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Four consecutive quarters of earnings beats averaging nearly 18% above estimates reflect genuine execution discipline, and roughly 12% headroom to the price target with a favorable risk/reward supports a watchlist view — but a confirmed price downtrend and the stock trading above current target create a timing challenge for new entries.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus earnings estimates in each of the last four quarters, with an average positive surprise of nearly 18%, indicating a management team that has consistently under-promised and over-delivered. Catalyst breakdown | EPS surprise remains positive (above 0%) for the next two reported quarters, and the average beat stays above 10%. | ↓Deteriorating |
| CounterA forward P/E of 22.5x and a PEG ratio of 3.82 suggest the market has already priced in robust future earnings; if even one quarter disappoints, the multiple could compress sharply given the premium embedded in the valuation. | ||
With approximately 12% headroom to the price target of $330 versus roughly 7% downside to the stop level, the risk/reward ratio of about 1.7-to-1 is nearly at the standard asymmetry bar, making the setup attractive if momentum recovers. Price targets | Price closes above $310 within two quarters and continues toward the $330 target without triggering the downside stop at $274. | ↓Deteriorating |
| CounterThe stock is currently trading above the max pain level of $240 — a significant premium — and high implied volatility of 75% suggests the options market anticipates a larger move than current positioning implies, adding uncertainty to the path toward target. | ||
The 200-day moving average slope is running at negative 1.1% per month and the stock is below that average — a confirmed downtrend that has blocked the momentum gate and limits the near-term conviction for new buyers. Momentum breakdown | For this pillar to be falsified, price must reclaim the 200-day moving average and the moving average slope must turn positive for at least 2 consecutive months. | ↓Deteriorating |
| CounterOn-balance volume is rising despite the price weakness, a divergence that suggests buyers are accumulating on weakness; if this accumulation precedes a catalyst, the downtrend could reverse quickly. | ||
A perfect Piotroski F-Score of 9 out of 9 alongside positive free cash flow (FCF yield of approximately 7%) signals that financial health and cash generation are both in good standing, providing a durable foundation beneath the current price weakness. Quality breakdown | The Piotroski score remains at 7 or above and free cash flow remains positive over the next four reported quarters. | ↓Deteriorating |
| CounterThe high short interest of 13% of float indicates that a meaningful portion of market participants has a negative near-term view of the business despite the strong balance sheet metrics, pointing to potential risks not yet reflected in the financial statements. | ||
The company has beaten consensus earnings estimates in each of the last four quarters, with an average positive surprise of nearly 18%, indicating a management team that has consistently under-promised and over-delivered.
↓DeterioratingCatalyst breakdown
- Expectation
- EPS surprise remains positive (above 0%) for the next two reported quarters, and the average beat stays above 10%.
CounterA forward P/E of 22.5x and a PEG ratio of 3.82 suggest the market has already priced in robust future earnings; if even one quarter disappoints, the multiple could compress sharply given the premium embedded in the valuation.
With approximately 12% headroom to the price target of $330 versus roughly 7% downside to the stop level, the risk/reward ratio of about 1.7-to-1 is nearly at the standard asymmetry bar, making the setup attractive if momentum recovers.
↓DeterioratingPrice targets
- Expectation
- Price closes above $310 within two quarters and continues toward the $330 target without triggering the downside stop at $274.
CounterThe stock is currently trading above the max pain level of $240 — a significant premium — and high implied volatility of 75% suggests the options market anticipates a larger move than current positioning implies, adding uncertainty to the path toward target.
The 200-day moving average slope is running at negative 1.1% per month and the stock is below that average — a confirmed downtrend that has blocked the momentum gate and limits the near-term conviction for new buyers.
↓DeterioratingMomentum breakdown
- Expectation
- For this pillar to be falsified, price must reclaim the 200-day moving average and the moving average slope must turn positive for at least 2 consecutive months.
CounterOn-balance volume is rising despite the price weakness, a divergence that suggests buyers are accumulating on weakness; if this accumulation precedes a catalyst, the downtrend could reverse quickly.
A perfect Piotroski F-Score of 9 out of 9 alongside positive free cash flow (FCF yield of approximately 7%) signals that financial health and cash generation are both in good standing, providing a durable foundation beneath the current price weakness.
↓DeterioratingQuality breakdown
- Expectation
- The Piotroski score remains at 7 or above and free cash flow remains positive over the next four reported quarters.
CounterThe high short interest of 13% of float indicates that a meaningful portion of market participants has a negative near-term view of the business despite the strong balance sheet metrics, pointing to potential risks not yet reflected in the financial statements.
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.8 |
| ROA | 4.5 |
| Gross margin | 5.0 |
| Op margin | 6.7 |
| Net margin | 4.8 |
| Current ratio | 5.0 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Strong Piotroski F-Score: 9/9
Growth
7.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.1 |
| EPS growth | 6.8 |
- ▸Strong growth: 23% YoY
Momentum
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.3 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.1 |
| Price target | 6.4 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (3.0) — signal dampened
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $860,877 (0.022% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.6 |
| quality rank | 4.4 |
| growth rank | 7.9 |
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.0 |
| support resistance | 3.0 |
| 52w position | 8.0 |
Risk (lower is worse)
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.8 |
| days to cover | 1.0 |
| volatility | 1.6 |
| put call | 10.0 |
| implied vol | 5.8 |
| beta | 6.3 |
| debt equity | 8.0 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.5 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.3>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:82d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (1)
- MOMENTUM:5.3<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
-0.72
Upside
-7.1%
Downside
10.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 63, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.9B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.3>=4.5. Top dim: Growth at 7.4; weakest: Value at 3.4. No conviction either direction.
The strongest dimensions are Growth at 7.4, Catalyst at 7.1, and Sentiment at 5.9; the weakest are Value at 3.4, Technical at 4.7, and Risk (lower is worse) at 5.1. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.72 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Favorable Upside Risk Reward
Trip ifPrice falls below $274, breaching the downside stop level and invalidating the risk/reward geometry.
- P3Confirmed Downtrend Momentum Failure
Trip ifPrice rises above the 200-day moving average and the moving-average slope rises above 0% for 2 consecutive months.
- P4Strong Balance Sheet Piotroski
Trip ifFree cash flow falls below $0 for 2 consecutive quarters.