KRNT - Kornit stock rises ~10% after Morgan Stanley upgrades on potential 'robust growth in 2024'
2023-08-10 10:17:24 ET
Kornit Digital ( NASDAQ: KRNT ) stock rose ~11% on Thursday after Morgan Stanley upgraded the shares to Overweight from Equal-weight.
The firm kept the price target unchanged to $29.
Kornit stock fell ~21% on Wednesday after reporting a relatively in-line quarter but guiding down H2 revenue about 7% below consensus expectations, according to the analysts.
The analysts added that the outlook decrease reflects continued weak capital spending and deals elongating, as customers which previously built out capacity in 2020-2021 including Kornit's largest customer Amazon, are retrenching and sweating assets until the macro environment improves.
However, the analysts do not think that near-term weakness dampens Kornit's 2024 outlook, where they forecast a return to double digit Y/Y revenue growth and Adjusted EBITDA profitability, catalyzed by a strong pipeline built out at the ITMA trade show in June and maintained strength in system upgrades.
The analysts think that yesterday's stock price reaction was overdone but noted that they agree that the near-term is weaker than they expected and that is why they have reduced their consensus H2'23 revenue by 12% post-earnings.
The analysts expect a return to double digit revenue growth for Kornit in 2024 due to the lower 2023 base; stronger than expected systems utilization commentary and consumables growth this quarter; and confirmation of a strong post-ITMA sales pipeline that they expect to convert in 2024.
The analysts said they are looking beyond the near-term challenges to what they think should still be a year of robust growth in 2024, and continue to forecast high 20% Y/Y revenue growth in CY24.
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Kornit stock rises ~10% after Morgan Stanley upgrades on potential 'robust growth in 2024'