Forensic Analysis · Durable Goods, Textiles & Apparel · as of Aug 10, 2026

Karat Packaging Inc. (KRT)

A forensic read on Karat Packaging Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.

A · High-quality compounder

Forensic grade

Safe

Financial health

11.4

Distress distance

Clean

Earnings quality

Forensic signals

29.6

P / E (ttm)

21.1%

ROE

$959M

Market cap

4.30%

Dividend yield

10.7%

Revenue growth

This free snapshot doesn't read filing or proxy text, so the auditor-quality and governance checks that can lower a grade were not evaluated (red flags, auditor quality, say on pay, board independence). Those checks only ever lower a grade, so the full analysis can land below the grade above but never above it — treat it as the most favourable reading, not the settled one.

Karat Packaging Inc. earns an A (High-quality compounder) forensic quality grade, and its balance-sheet distress test reads 11.4, placing it in the Safe zone. 2 forensic signals were flagged in its latest SEC filings, led by shareholder returns.

What the filings flag

118% of FCF

FY2025

Shareholder returns. Returned $39M to shareholders (buybacks + dividends) in FY2025 — 118% of free cash flow. More than free cash flow generated — and beyond operating cash too, so the extra is coming from debt or cash reserves, which isn't sustainable indefinitely. Counting the $1M of stock-based comp paid out in shares on top of that, the combined claim on free cash flow is 122%.

+0.4%/yr

FY2022–FY2025

Share count. Diluted share count changed +1% over the last 3 years to FY2025 (+0.4%/yr). Roughly flat — buybacks ($3M) are about offsetting stock comp ($1M), not shrinking the count. Per-share value isn't being meaningfully helped or hurt by the count.

Key fundamentals

Latest Revenue$467.7M

Revenue Growth YoY+10.7%

Revenue CAGR (3yr)+3.4%

Net Margin6.7%

Free Cash Flow$33.1M

Return on Equity21.1%

Debt / Equity0.33x

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Data from SEC EDGAR public filings · metrics as of Aug 10, 2026. Forensic signals flag probability, not certainty.