Investors continue to dump shares of Kornit Digital Ltd (NASDAQ:KRNT), after the digital textile printing company announced that third-quarter revenues will be lower than previously anticipated and in the range of $27 million to $28.5 million, compared to prior expectations of $34 million to $38 million. The lower-than-expected revenues are the result of a customer being unable to take delivery of a large number of systems at a new facility due to permitting challenges.
As of this writing, Kornit shares are falling 24% to $13.07.
Gabi Seligsohn, Kornit Digital’s Chief Executive Officer commented, “We are disappointed in the further delay of a key customer’s site launch which caused a significant reduction in our quarterly revenues. At the same time, this important customer remains committed to the Kornit platform and we stand ready to execute on the program when site permit issues abate. This issue notwithstanding, our underlying business continues to grow and we continue to drive meaningful progress in achieving our strategic objectives. During the third quarter we added two new Vulcan customers, received an order for multiple Storm Hexa systems from a leading Chinese e-commerce player and continued to increase sales of upgrades, bringing us close to our targeted breakeven point in our services business. I am confident that our strategy will allow us to continue to lead the DTG market as well as expand our position in the roll-to-roll market at a time when digital printing is enabling an online revolution.”
On the ratings front, KRNT stock has been the subject of a number of recent research reports. In a report released today, Citigroup analyst Kenneth Wong downgraded KRNT to Hold, with a price target of $14, which represents a potential downside of 18% from where the stock is currently trading. Separately, Canaccord Genuity’s Robert Burleson maintained a Buy rating on the stock and has a price target of $18.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Kenneth Wong and Robert Burleson have a yearly average return of 6.1% and 13.8% respectively. Wong has a success rate of 47% and is ranked #2061 out of 4660 analysts, while Burleson has a success rate of 62% and is ranked #144.
Overall, one research analyst has assigned a Hold rating and 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $20.00 which is 17% above where the stock closed yesterday.
Kornit Digital Ltd. engages in the development, manufacture, and marketing of industrial and commercial printing solutions for the garment, apparel, and textile industries. It offers printing solutions for apparel, polyester, sportswear, beachwear, accessories, paradigm shirt, textiles, curtains, cushions and couches.