Kenon Holdings Ltd. Ordinary Shares (KEN)

FairStock Score: 27/100 — RISKY

Key Financials

Strengths

• Generates $32 million in annual free cash flow (0.8% yield on market cap)
• Revenue growth of 43.1% demonstrates strong top-line momentum
• Attractive 4.8% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($30) with negative 176% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration

AI Analysis

Kenon Holdings Ltd. Ordinary Shares is a small-cap utilities company valued at $4.2 billion. Revenue stands at $872 million, though the company is currently unprofitable. From a quality standpoint, Kenon shows Altman Z-Score of 1.9 in the grey zone and modest 5% ROE. On valuation, the stock is commanding a steep 64.0x multiple, with trades far above its Graham Number ($30) with no margin of safety. Growth dynamics show revenue growing at 43.1% and profit growth of -94.2%. The 4.8% dividend yield adds an income component for patient holders. Our composite FairStock Score of 27/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Kenon's 43% revenue growth trajectory could accelerate as it captures additional market share in the utilities sector. With $32 million in annual free cash flow (0.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 64x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. 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