Shareholders of Karat Packaging Inc. (NASDAQ:KRT) will be pleased this week, given that the stock price is up 11% to US$29.62 following its latest quarterly results. Karat Packaging reported in line with analyst predictions, delivering revenues of US$113m and statutory earnings per share of US$0.45, suggesting the business is executing well and in line with its plan. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the four analysts covering Karat Packaging are now predicting revenues of US$456.5m in 2025. If met, this would reflect a solid 9.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 44% to US$2.04. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$459.4m and earnings per share (EPS) of US$1.44 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the massive increase in earnings per share expectations following these results.

The consensus price target fell 5.9% to US$31.67, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Karat Packaging analyst has a price target of US$35.00 per share, while the most pessimistic values it at US$28.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Karat Packaging is an easy business to forecast or the the analysts are all using similar assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Karat Packaging's revenue growth is expected to slow, with the forecast 7.6% annualised growth rate until the end of 2025 being well below the historical 12% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.4% annually. So it's pretty clear that, while Karat Packaging's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Karat Packaging following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Karat Packaging going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Karat Packaging .

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.