K-Bro Linen (KBL) AI Stock Analysis

• Market Cap: C$337.46M
• Dividend Yield: 3.75%
• Average Volume (3M): 6.06K
• Price to Earnings (P/E): 17.9
• Beta (1Y): 0.48
• Revenue Growth: 16.67%
• EPS Growth: 40.01%
• Country: CA
• Employees: 3,000
• Sector: Industrials
• Sector Strength: 68
• Industry: Corporate Services
• EPS (TTM): 1.79
• Shares Outstanding: 10,463,864
• 10 Day Avg. Volume: 5,430
• 30 Day Avg. Volume: 6,064
• PEG Ratio: 0.45
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.93
• Price to Cash Flow (P/CF): 4.60
• P/FCF Ratio: 4.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$46.00
• Price Target Upside: 43.62% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

K-Bro Linen exhibits a solid overall performance driven by strong financials and positive earnings call outcomes. The company's stable revenue growth and robust cash flows are complemented by strategic acquisitions enhancing growth prospects. Technical analysis and valuation metrics suggest a neutral stance, while increased costs and tax implications present areas of caution.

K-Bro Linen Business Overview & Revenue Model

Company Description

K-Bro Linen Inc is a healthcare and hospitality laundry and linen processor in Canada. It operates around 15 facilities in major cities across Canada, and two distribution centers, providing management services and laundry processing of hospitality, healthcare, and specialty linens. The company provides vital products and services that help people heal, travel, live, and play. It is helping hospitals and extended care centers care for the young, old, and vulnerable in environmentally responsible ways. It operates through two divisions such as the Canadian division and the UK division.

How the Company Makes Money

K-Bro Linen makes money through its core business of providing linen and laundry services to the healthcare and hospitality sectors. The company's revenue model is based on long-term contracts with hospitals, healthcare facilities, and hotels, which provide a steady and predictable income stream. These contracts typically involve the regular collection, cleaning, and delivery of linens and garments, for which K-Bro charges service fees. Additional revenue is generated through supplementary services such as inventory management and specialized cleaning processes. The company may also engage in partnerships with healthcare systems or hospitality chains to expand its service offerings and enhance its market presence.

K-Bro Linen Financial Statement Overview

Summary

K-Bro Linen exhibits a strong financial position with consistent revenue growth, solid cash flow generation, and moderate profitability. While the company maintains operational efficiency, there's room to enhance net profitability and monitor debt levels to ensure long-term financial stability. Overall, the financial statements present a promising outlook with stable growth prospects.

Income Statement

K-Bro Linen has shown strong revenue growth with a TTM increase of about 12.40% from the previous year. The company maintains a healthy gross profit margin of approximately 38.81% in the TTM, indicating efficient control over production costs. However, the net profit margin is relatively modest at 5.19%, suggesting room for improvement in managing non-operating expenses. Steady EBIT and EBITDA margins at 8.95% and 18.11% respectively reflect stable operational efficiency.

Balance Sheet

The balance sheet presents a debt-to-equity ratio of 1.02, which is relatively high but manageable, indicating a balanced use of debt and equity. The equity ratio stands at 41.66%, showing a substantial portion of assets funded by equity. Return on Equity is decent at 9.94%, suggesting moderate profitability relative to equity. The financial leverage appears controlled but warrants monitoring to avoid increased financial risk.

Cash Flow

The company demonstrates robust cash flow health with an operating cash flow to net income ratio of 2.50, indicating strong cash earnings. Free cash flow growth is positive, with a slight increase to $30.73 million, highlighting effective cash management. Free cash flow to net income ratio at 1.64 further supports the company's capability to generate cash in excess of capital expenditures.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement		Total Revenue
360.63M	320.88M	276.62M	223.99M	196.59M	252.41M
	Gross Profit
140.00M	114.48M	234.35M	186.99M	164.82M	216.69M
	EBIT
32.28M	28.49M	9.27M	15.44M	15.54M	19.17M
	EBITDA
65.32M	56.45M	36.49M	42.79M	38.24M	47.57M
	Net Income Common Stockholders
18.72M	17.61M	3.91M	8.69M	3.78M	10.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.83M	5.86M	2.64M	1.11M	2.42M	5.30M
	Total Assets
322.23M	364.72M	325.76M	332.52M	323.81M	352.06M
	Total Debt
70.20M	123.55M	98.82M	94.91M	86.66M	109.32M
	Net Debt
67.38M	117.69M	96.19M	93.80M	84.24M	104.02M
	Total Liabilities
123.57M	190.28M	149.22M	146.12M	134.31M	156.01M
	Stockholders Equity
198.66M	174.43M	176.54M	186.40M	189.50M	196.05M
Cash Flow		Free Cash Flow
30.73M	29.02M	14.67M	21.38M	37.98M	29.54M
	Operating Cash Flow
46.76M	41.01M	26.13M	31.88M	42.40M	43.92M
	Investing Cash Flow
-81.95M	-34.26M	-11.43M	-10.49M	-4.41M	-14.33M
	Financing Cash Flow
50.34M	-3.72M	-13.11M	-22.69M	-40.83M	-27.10M

K-Bro Linen Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.03
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KBL, the sentiment is Negative. The current price of 32.03 is below the 20-day moving average (MA) of 33.97, below the 50-day MA of 35.51, and below the 200-day MA of 34.87, indicating a bearish trend. The MACD of -0.93 indicates Positive momentum. The RSI at 25.91 is Positive, neither overbought nor oversold. The STOCH value of 8.35 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KBL.

K-Bro Linen Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KBL	72 Outperform	C$337.46M	17.91	10.26%	3.75%	16.67%	40.01%
SIS	66 Neutral	C$1.18B	24.07	8.63%	3.21%	3.68%	19.78%
Sector *	61 Neutral	$8.22B	13.01	0.73%	3.10%	3.88%	-16.90%
HLS	52 Neutral	C$127.17M	―	-23.20%	―	-8.80%	26.77%
AGT	45 Neutral		―	-10.69%	―	―	―

K-Bro Linen Corporate Events

K-Bro Linen Declares January 2025 Dividend

K-Bro Linen Inc. has declared a dividend of 10.00 cents CDN per common share for January 2025, reflecting its regular policy of monthly dividends to shareholders of record on the last business day of the month. This announcement underscores K-Bro’s stable financial practices and continues to support its stakeholders with predictable returns, potentially enhancing its position within the linen processing industry.

K-Bro Linen Announces December 2024 Dividend

K-Bro Linen Inc., Canada’s largest operator of laundry and linen processing facilities, has announced a December dividend of 10 cents per share to be paid in January. The company provides linen services to healthcare, hospitality, and other commercial sectors across Canada and has additional operations in Scotland and the North East of England.

K-Bro Linen Reports Strong Q3 Revenue Growth

K-Bro Linen Inc. reported a robust 20.2% increase in Q3 2024 revenue, driven by notable growth in both its healthcare and hospitality segments. The company’s adjusted EBITDA saw a significant rise, highlighting the positive impact of recent acquisitions and stabilized market conditions. Additionally, K-Bro’s dividend declaration and expanded credit facilities underscore its financial confidence and strategic growth initiatives.