KRNT - Kornit Digital: New Go-To-Market Approach Holds Long-Term Promise - Buy

2024-05-13 15:36:42 ET

Summary

• Kornit Digital Ltd. reported mediocre first quarter results as the company continues to operate in a challenging business environment.
• However, Kornit managed to generate $2.7 million in free cash flow and continues to have no debt. Cash and cash equivalents at the end of Q1 amounted to $551 million.
• The company will introduce a new sales approach called the "All-Inclusive Click Program" designed to remove entry barriers for prospective customers.
• If executed successfully, the company should build a material stream of recurring high-margin revenues over time. However, the initial impact on revenues and cash flows will be negative.
• With 2025 expected to show early results from the new program, I am reiterating my "Buy" rating for Kornit Digital Ltd. with a slightly lowered price target of $20.

Note:

I have covered Kornit Digital Ltd. ( KRNT) previously, so investors should view this as an update to my earlier articles on the company. ...

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