Kimball Electronics Inc. Common Stock (KE)

FairStock Score: 42/100 — MIXED

Key Financials

Strengths

• Generates $77 million in annual free cash flow (11.4% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.30, providing financial flexibility

Concerns

• Revenue declining at 4.5% year-over-year signals potential demand weakness or market share loss
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Kimball Electronics Inc. Common Stock is a micro-cap industrials company valued at $675 million. The business generates $1.5 billion in annual revenue with a 0.2% net margin and $77 million in free cash flow. From a quality standpoint, Kimball shows Altman Z-Score of 2.0 in the grey zone and modest 4% ROE. On valuation, the stock is trading at a premium 28.0x earnings, with trades above its Graham Number with a negative 21% margin. Growth dynamics show revenue growing at -4.5% and profit growth of 6.0%. Our composite FairStock Score of 42/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $77 million in annual free cash flow (11.4% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the industrials space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer