Kennametal Inc. KMT
Kennametal's FY2026 results show a dramatic earnings inflection — EPS of $4.42 versus $1.20 in FY2025, Q4 sales up 43%, and operating margin expanding from 7.3% to 20.1% — yet the stock trades at just 7.1x P/E and 5.3x EV/EBITDA, roughly 75% and 62% below peer medians, as of the quarter ended 2026-06-30. The deep discount is justified by a severe earnings-quality gap: FY2026 net income of $342 million coexisted with negative operating cash flow of -$4.0 million and free cash flow of -$80.9 million, while total debt rose to $731.5 million.
With the stock at $30.74, below both its 50-day ($34.04) and 200-day ($33.97) moving averages and MACD histogram negative, the market is pricing in sustainability risk that the earnings beat has not yet dispelled; hold until cash flow conversion normalizes.
What could go wrong
- Cash flow disconnect. FY2026 net income of $342 million versus operating cash flow of -$4.0 million and free cash flow of -$80.9 million suggests earnings may not be cash-backed, raising sustainability questions.
- Rising leverage. Total debt increased to $731.5 million in FY2026 from $643.4 million in FY2025, even as the company generated negative free cash flow.
- Bearish technicals. Stock at $30.74 trades below both the 50-day ($34.04) and 200-day ($33.97) moving averages with MACD histogram at -0.28 and RSI at 38.9.
- Earnings quality of beat. Management cited timing and pricing actions tied to elevated tungsten costs as drivers of the Q4 beat, suggesting some earnings strength may not recur.
What would change my mind
Where this comes from: FMP annual fundamentals, fiscal year ended 2026-06-30 · PRNewsWire press release, 2026-08-05 · derived_metrics, FY2025 vs FY2026 · peer_relative composite, as of 2026-08-18. Orin's read on KMT; not advice.
Twelve months actual closes to 2026-09-23 · actual filings
50-day average 200-day average · volume below
On file
All KMT filingsLargest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Vanguard Portfolio Management | $209.3M | 0.0% of fund |
| Vanguard Capital Management | $120.6M | 0.0% of fund |
| State Street | $108.2M | 0.0% of fund |
| Fmr | $89.9M | 0.0% of fund |
| Geode Capital Management | $79.0M | 0.0% of fund |
| Charles Schwab Investment Management | $49.8M | 0.0% of fund |
57 filers · quarter ended Q2 2026 · positions, not flows
Insiders, last 24 months: 310 Form 4 filings, net −$3.8M. Of the 50 on hand, 2 were open-market purchases and 2 sales— the rest are grants, option exercises and tax withholding.
Ask Orin about KMT
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Start 3 free days →Where it trades
| Metric | Now | Own median | Sector |
|---|---|---|---|
| P/E | 6.7× | — | 44.5× |
| EV/EBITDA | 5.0× | — | — |
| P/S | 0.97× | — | — |
| P/B | 1.5× | — | — |
What Wall Street published
$36
$30 – $48 · +22% against today's price
- 5 buy or overweight
- 13 hold
- 6 underweight or sell
The analysts’ consensus and their own ratings, not Orin’s. A target is a twelve-month opinion published by the firm that wrote it.
Against the companies it is compared to
| Company | Market cap | P/E | EV/EBITDA | Gross | Net | ROE |
|---|---|---|---|---|---|---|
| KMTKennametal Inc. | $2B | 6.7× | 5.0× | 41.1% | 14.5% | 25% |
| ARCBArcBest Corp | $3B | 187.3× | 26.6× | 53.8% | 0.4% | 1% |
| CECOCECO Environmental Corp. | $4B | — | 286.9× | 32.7% | -3.0% | -4% |
| HLIOHelios Technologies, Inc. | $2B | 32.2× | 13.2× | 32.7% | 8.0% | 8% |
| HLMNHillman Solutions Corp. | $1B | 32.7× | 8.4× | 45.8% | 2.6% | 3% |
| ICFIICF International, Inc. | $2B | 17.2× | 11.8× | 35.6% | 4.9% | 9% |
| MVSTMicrovast Holdings, Inc. | $232M | 4.3× | 3.7× | 25.1% | 13.9% | 12% |
The median is of the 5 peers listed above and nothing else — check it against the column. This company trades 79.3% below it. The peer set is the vendor’s, so a company can appear here that a person would not have chosen.
What it has traded at
What its sector has traded at
Two scales, drawn separately on purpose: a sector median and one company’s multiple are not the same number and putting them on one axis invites a comparison neither series supports.
Every estimate on one scale
The vertical rule is the current price. Ranges and point estimates are the backend’s, published as they were calculated; an arrow means the estimate sits beyond this scale, and its number is on the right.