Kennametal Inc. Common Stock (KMT)

FairStock Score: 54/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

As a value investor, I start with the business. Kennametal sells tungsten carbide cutting tools and wear parts, consumables that wear out and are replaced, which supports some recurring demand and brand loyalty in Metal Cutting. But it is a cyclical industrial supplier, not a wide-moat franchise. The recent numbers are striking: in fiscal year 2026, the year ended 2026-06-30, filed figures show revenue of $2.4B, net income of $342.4M, and diluted EPS of $4.42, versus net income of $93.1M and diluted EPS of $1.20 in fiscal year 2025, ended 2025-06-30. At the 2026-10-13 close of $31.32, FairStock's calculations show a P/E of 7.09, P/B of 1.52, EV/EBITDA of 4.83, and a Graham Number of $45.26, a 30.8% margin of safety. ROE is 23.85%, ROCE 10.45%, and debt/equity is 0.47. That looks cheap if $4.42 is normalized. However, trailing free cash flow is negative $80.9M, a -3.4% FCF yield, so reported earnings are not converting to cash. Piotroski is 6/9 and Altman is 2.54, not distressed, but not fortress-like. FairStock classifies it as a Stalwart, citing 44.5% annual profit growth over five years and only 5.1% revenue growth. I suspect profit growth is cyclical or recovery-driven, so the low multiple may reflect peak margins. I would need cash flow to confirm the earnings before trusting the discount.

In plain English: Kennametal makes cutting tools and hard-material parts used in manufacturing and infrastructure. The business has become much more profitable lately and carries moderate debt, but it is not generating cash after investments, which is a warning sign. At $31.32, the price looks low compared with its reported earnings, though sales growth has been modest and the industry is cyclical.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q3 2026 10-Q (period ended 2026-03-31) · fiscal Q2 2026 10-Q (period ended 2025-12-31) · fiscal Q1 2026 10-Q (period ended 2025-09-30) · fiscal Q3 2025 10-Q (period ended 2025-03-31) · FY2026 10-K (period ended 2026-06-30) · FY2025 10-K (period ended 2025-06-30) · FY2024 10-K (period ended 2024-06-30)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer