Summary

• Kornit Digital reported first quarter results above consensus expectations and provided Q2 revenue guidance ahead of analyst estimates as the company continues to execute on its business model transition.
• On the flip side, a combination of tariffs, currency headwinds, and seasonal changes in product mix resulted in gross margins dropping to new two-year lows.
• However, KRNT management expects gross margins to improve over the course of the year due to higher utilization, increasing recurring revenues, improved product mix, and higher operating leverage.
• For my part, I am not concerned by temporary margin headwinds and would urge investors to focus on improving sales trends, which are reflected in Kornit's better-than-expected Q2 revenue outlook.
• Given encouraging sales trends and improved visibility, I am raising my price target from $18.50 to $23.00 while reiterating my "Buy" rating on the company's shares.
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Note:

I have covered Kornit Digital Ltd., or "Kornit" (KRNT), previously, so investors should view this as an update to my earlier articles on the company.

Q1/2026 Earnings Review

Last week, Kornit reported first quarter results

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Analyst’s Disclosure: I/we have a beneficial long position in the shares of KRNT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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