10 Best Packaging Stocks to Buy According to Analysts

4. Karat Packaging Inc. (NASDAQ:KRT)

Average Upside Potential: 18.52%

Number of Hedge Fund Holders: 7

Karat Packaging Inc. (NASDAQ:KRT) manufactures and distributes single-use disposable products used in various restaurant and food service settings. The company’s products include food packaging, containers, tableware, cups, lids, cutlery, and straws. Additionally, KRT distributes certain specialty food and beverage products and offers customized solutions, including new product development and design, printing, and logistics services.

Karat’s history reflects that it has been a consistently growing manufacturer and distributor of disposable products for restaurants and the food service industry. The firm has numerous competitive strengths including being a one-stop shop supplier with broad product offerings, global sourcing capabilities, leadership in eco-friendly products, customized solutions as well as a diverse and growing blue-chip customer base. Since the growth of the food delivery and takeout market has highly increased the demand for disposable packaging, the market conditions are favorable.

For the second quarter, Karat Packaging Inc. (NASDAQ:KRT) posted net sales of $112.6 million as compared to $108.7 million in the prior year quarter. Despite the higher ocean freight costs which spiked in mid-May and were high through July, the firm’s gross margin remained steady. While KRT continues to expand its business pipeline, it faced issues during Q2 with the initiation of certain new orders taking longer, partly due to administrative set-up procedures at a number of the larger chain accounts and softer demand in certain categories.

Thus, Karat Packaging Inc. (NASDAQ:KRT) is a leading packaging company with a history of proven success, a bunch of competitive edges as aforementioned, and a positive market outlook. The firm also has the ability to continuously augment product offerings to cater to changing customer needs.