Breaking Down Knowles Corporation (KN) Financial Health: Key Insights for Investors

Are you keeping a close watch on Knowles Corporation (KN) and wondering about its financial stability? Did you know that in 2024, Knowles experienced a 21% increase in revenue from continuing operations? But how does this growth translate into overall financial health, especially with an EPS of $0.27, slightly missing the forecasted $0.28 in Q4 2024? Let’s dive into the key insights that can help you assess Knowles' financial position and make informed investment decisions.

Knowles Corporation (KN) Revenue Analysis

Knowles Corporation (KN) operates primarily through two business segments: Precision Devices (PD) and MedTech & Specialty Audio (M&SA). A detailed understanding of the revenue streams within these segments is crucial for investors.

The Precision Devices (PD) segment focuses on manufacturing and selling a variety of micro-acoustic components, including microphones, speakers, and transducers, which are essential in mobile communications, hearing health, and other consumer electronics applications.

The MedTech & Specialty Audio (M&SA) segment provides advanced acoustic and electro-mechanical solutions for the medical and high-end audio markets. This includes products like hearing aid components, high-performance microphones, and audio solutions for specialty applications.

Analyzing Knowles Corporation's revenue involves examining the contribution of each business segment to the overall revenue. For the fiscal year 2024, let's consider how each segment has performed and any notable changes in their revenue streams.

Here's a sample breakdown of what a revenue analysis might look like:

• Precision Devices (PD): This segment's revenue might be driven by demand in the smartphone market and the adoption of advanced audio technologies in consumer devices. Revenue could be influenced by global smartphone sales, technological advancements in audio processing, and Knowles' ability to secure key contracts with major mobile device manufacturers.
• MedTech & Specialty Audio (M&SA): Revenue in this segment is likely influenced by the aging global population, advancements in hearing aid technology, and the demand for high-quality audio solutions in medical devices. Knowles' innovation in micro-acoustic solutions and partnerships with leading medical device companies can significantly impact revenue.

To illustrate the historical trends, consider a hypothetical year-over-year revenue performance for Knowles Corporation:

In this example, Knowles Corporation shows a consistent year-over-year revenue growth rate, albeit with a slight deceleration. This could be attributed to market saturation, increased competition, or other macroeconomic factors.

For investors, understanding these revenue dynamics is crucial. Significant changes in revenue streams, such as a sudden increase in demand for MedTech solutions or a decline in Precision Devices sales due to market competition, can signal shifts in the company's strategic focus and overall financial health.

Knowles Corporation (KN) Profitability Metrics

Assessing the financial health of Knowles Corporation (KN) requires a detailed examination of its profitability metrics. By evaluating gross profit, operating profit, and net profit margins, we can gain valuable insights into the company's efficiency and overall financial performance. Furthermore, comparing these metrics against industry averages and analyzing trends over time provides a comprehensive understanding of Knowles's financial strengths and weaknesses. Let's explore these key areas to dissect Knowles Corporation's profitability.

Here is a brief overview of key profitability metrics:

• Gross Profit: The revenue left over after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs.
• Operating Profit: Calculated by deducting operating expenses from gross profit, it reflects the profit earned from the company's core business operations.
• Net Profit: The profit remaining after all expenses, including interest and taxes, have been deducted from revenue. It represents the company's bottom-line profitability.

For the fiscal year 2024, Knowles Corporation reported the following profitability metrics:

Knowles Corporation's financial performance can be further understood by examining specific profitability ratios. These ratios help in benchmarking the company against its competitors and industry standards.

• Gross Profit Margin: This ratio shows the percentage of revenue remaining after subtracting the cost of goods sold and is calculated as (Gross Profit / Revenue) 100.
• Operating Profit Margin: This ratio indicates the percentage of revenue remaining after subtracting operating expenses and is calculated as (Operating Profit / Revenue) 100.
• Net Profit Margin: Calculated as (Net Profit / Revenue) 100, this ratio represents the percentage of revenue that translates into profit after all expenses are paid.

Analyzing these margins over several periods provides insights into the company's ability to maintain or improve its profitability. Here’s a look into Knowles’s profitability metrics:

• In Q1 2024, Knowles reported a gross profit margin of 39%, indicating efficient cost management in production.
• The operating profit margin for Q1 2024 stood at 13%, reflecting healthy operational efficiency.
• Knowles' net profit margin for the same period was 8%, showcasing its ability to convert revenue into net earnings effectively.

To fully grasp Knowles Corporation's financial health, it's essential to compare its profitability ratios with industry averages. This comparison helps determine whether Knowles is performing above or below its peers. For instance, if the industry average for gross profit margin is 35% and Knowles reports 39%, it indicates a competitive advantage in cost management. Similarly, comparing operating and net profit margins provides a clear picture of Knowles's overall financial efficiency and profitability relative to its industry.

Here’s an overview of how these metrics can be analyzed:

• Cost Management: A higher gross profit margin than the industry average suggests superior cost management.
• Operational Efficiency: A strong operating profit margin indicates effective control over operating expenses.
• Overall Profitability: A healthy net profit margin demonstrates the company's ability to generate profit after all expenses.

Examining operational efficiency involves analyzing how well Knowles manages its costs and gross margin trends. Effective cost management directly impacts the gross margin, which is a critical indicator of profitability. By monitoring these trends, investors can assess whether Knowles is improving its operational efficiency over time. For example, consistent increases in gross margin suggest better cost control and potentially higher profitability.

For further insights into Knowles Corporation's financial health, you can refer to this comprehensive analysis: Breaking Down Knowles Corporation (KN) Financial Health: Key Insights for Investors

Knowles Corporation (KN) Debt vs. Equity Structure

Understanding how Knowles Corporation (KN) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, its debt-to-equity ratio, and how it strategically uses debt versus equity to fund its activities.

As of the fiscal year 2024, Knowles Corporation (KN) maintains a mix of both short-term and long-term debt. While the specifics of these figures fluctuate, analyzing the most recent financial statements provides a clear snapshot. For instance, examining the latest 10-K filing will show the exact amounts of short-term liabilities (due within one year) and long-term debt (due beyond one year). This breakdown is essential for assessing the company's immediate and future financial obligations.

The debt-to-equity ratio is a key metric for evaluating Knowles Corporation's (KN) financial leverage. It indicates the proportion of debt and equity the company uses to finance its assets. A high ratio suggests greater reliance on debt, which can amplify both profits and losses. Conversely, a lower ratio indicates a more conservative approach. Comparing Knowles Corporation's (KN) debt-to-equity ratio with industry averages offers valuable context. If Knowles Corporation's (KN) ratio is significantly higher than its peers, it may signal higher financial risk. Industry standards vary, so a direct comparison provides a more accurate assessment.

Recent activities, such as new debt issuances, credit rating changes, or refinancing efforts, provide insights into Knowles Corporation's (KN) financial strategy. For example, a debt issuance might fund an acquisition or expansion, while a credit rating upgrade can lower borrowing costs. Refinancing activities could extend debt maturities or reduce interest rates, improving cash flow. Keeping track of these events helps investors understand how Knowles Corporation (KN) manages its capital structure and responds to market conditions.

The balance between debt and equity is a strategic decision. Debt financing can offer tax advantages and doesn't dilute ownership, but it also increases financial risk. Equity funding, on the other hand, strengthens the balance sheet but dilutes existing shareholders' stakes. Knowles Corporation's (KN) approach to this balance reflects its growth strategy, risk tolerance, and market conditions. Monitoring this balance helps investors assess the company's long-term financial stability and growth potential.

Here's a general overview of factors that might influence Knowles Corporation's (KN) decisions regarding debt and equity:

• Market Conditions: Interest rates and investor sentiment can impact the cost and availability of debt and equity financing.
• Growth Plans: Ambitious expansion or acquisition plans may require significant capital, influencing the choice between debt and equity.
• Financial Performance: Strong profitability and cash flow can support higher debt levels, while weaker performance may necessitate equity funding.
• Strategic Goals: The company's long-term vision and strategic priorities play a crucial role in determining its capital structure.

For example, consider a hypothetical scenario:

In this scenario, Knowles Corporation (KN) reduced its long-term debt and slightly increased its short-term debt while growing its equity. This led to a lower debt-to-equity ratio, suggesting improved financial leverage and reduced risk. However, always refer to the most recent financial statements for accurate, up-to-date figures.

Knowles Corporation (KN) Liquidity and Solvency

Assessing Knowles Corporation's financial health requires a close look at its liquidity and solvency positions. These metrics provide insights into the company's ability to meet its short-term obligations and long-term financial stability.

Liquidity Ratios: Analyzing the current and quick ratios helps to understand Knowles Corporation's ability to cover its short-term liabilities with its most liquid assets. A higher ratio generally indicates a stronger liquidity position. According to the 2024 data, Knowles Corporation's financial statements provide the figures needed to calculate these ratios, offering a clear view of their liquidity standing.

Working Capital Trends: Monitoring the trends in working capital—the difference between current assets and current liabilities—is crucial. An increasing working capital suggests improved short-term financial health, while a decreasing trend may signal potential challenges. The analysis of working capital involves examining the components, such as accounts receivable, accounts payable, and inventory levels, to identify underlying factors affecting liquidity.

Cash Flow Statements Overview: A thorough examination of cash flow statements reveals the trends in operating, investing, and financing activities. Positive operating cash flow indicates that the company is generating sufficient cash from its core business operations. Meanwhile, investing and financing activities provide insights into capital expenditures, acquisitions, and debt management strategies. Analyzing these trends helps to assess the overall cash flow health of Knowles Corporation.

Potential Liquidity Concerns or Strengths: Identifying potential liquidity concerns or strengths involves evaluating various factors, such as the company's debt levels, access to credit facilities, and ability to generate cash from operations. A strong cash position and access to additional funding sources can provide a buffer against unexpected financial challenges. Conversely, high debt levels and declining cash flows may raise concerns about the company's ability to meet its obligations.

For the fiscal year 2024, examining the specific figures in Knowles Corporation's financial statements allows for a detailed assessment of these key metrics. The trends and ratios derived from these statements offer valuable insights into the company's financial health and its ability to navigate potential challenges.

Here's a brief overview of key liquidity ratios:

• Current Ratio: Current Assets / Current Liabilities
• Quick Ratio: (Current Assets - Inventory) / Current Liabilities
• Cash Flow from Operations: Net income + Depreciation – Changes in Working Capital

A comparative analysis with industry peers can provide additional context to assess whether Knowles Corporation's liquidity and solvency positions are in line with industry standards or if there are areas that require attention.

Knowles Corporation (KN) Valuation Analysis

Assessing whether Knowles Corporation (KN) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. These indicators provide a comprehensive view of the company's current market position relative to its intrinsic value.

Key valuation ratios for Knowles Corporation (KN) include:

• Price-to-Earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help determine whether the stock price is justified by the company's net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is used to assess the total value of the company (including debt) against its earnings before interest, taxes, depreciation, and amortization. It provides a clearer picture of valuation, especially when comparing companies with different capital structures.

Analyzing Knowles Corporation (KN)'s stock price trends over the past year or longer provides context on market sentiment and investor confidence. Significant price appreciation could suggest growing optimism, while a declining trend might indicate concerns about the company's performance or industry outlook.

As of April 21, 2025, recent data indicates the following about Knowles Corporation (KN):

• The last price was $21.81 as of April 18, 2024.
• The 1-year target estimate is $28.00.

Dividend yield and payout ratios are important for investors seeking income. However, it should be noted that Knowles Corporation does not currently offer dividends. Therefore, these metrics are not applicable in assessing its valuation from an income perspective.

Analyst consensus plays a crucial role in gauging market sentiment. A consensus rating of 'buy' suggests analysts believe the stock is undervalued, while 'hold' indicates a neutral stance, and 'sell' suggests potential overvaluation. It is important to consider the number of analysts contributing to the consensus and their track records.

For a deeper dive into who is investing in Knowles Corporation and why, check out this investor profile: Exploring Knowles Corporation (KN) Investor Profile: Who’s Buying and Why?

By examining these factors collectively, investors can form a more informed opinion on whether Knowles Corporation (KN) is fairly valued in the current market.

Knowles Corporation (KN) Risk Factors

Knowles Corporation faces a variety of internal and external risks that could impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company's stability and growth potential. For further insights, you can refer to: Breaking Down Knowles Corporation (KN) Financial Health: Key Insights for Investors

Here's an overview of key risks:

• Industry Competition: The markets for Knowles Corporation's products are highly competitive.
• Regulatory Changes: Changes in laws, regulations, or government policies could adversely impact Knowles Corporation's business, operations, and financial results.
• Market Conditions: Downturns or instability in the markets served by Knowles Corporation could reduce demand for its products and services.

To provide a clearer picture, consider the following potential risk factors:

Operational Risks:

• Supply Chain Disruptions: Interruptions in the supply of critical components could affect production and increase costs.
• Manufacturing Issues: Problems with product quality or manufacturing efficiency could lead to higher expenses and reduced sales.

Financial Risks:

• Debt Levels: High levels of debt could constrain Knowles Corporation's ability to invest in growth opportunities.
• Interest Rate Fluctuations: Changes in interest rates could increase borrowing costs and reduce profitability.

Strategic Risks:

• Technological Obsolescence: Rapid changes in technology could make Knowles Corporation's products obsolete.
• Acquisition Integration: Challenges in integrating acquired businesses could lead to operational inefficiencies and financial losses.

Mitigation strategies or plans (if available): Knowles Corporation often outlines its strategies for mitigating these risks in its annual reports and SEC filings. These strategies may include diversifying its supply chain, investing in research and development, and maintaining a strong balance sheet.

Knowles Corporation (KN) Growth Opportunities

Knowles Corporation's future growth prospects are underpinned by several key drivers, including product innovation, strategic market expansions, and potential acquisitions. These elements collectively contribute to the company's revenue and earnings potential.

Analysis of key growth drivers:

• Product Innovation: Knowles is focused on developing advanced micro-acoustic, audio processing, and precision device solutions. These innovations cater to the evolving needs of the mobile, ear, IoT, and medtech markets.
• Market Expansion: The company strategically expands its reach within existing markets and penetrates new geographical regions to increase its customer base and revenue streams.
• Acquisitions: Knowles actively pursues acquisitions to enhance its technology portfolio, expand its market presence, and create synergies that drive growth.

Future revenue growth projections and earnings estimates are contingent upon Knowles' ability to capitalize on these growth drivers. Analysts' estimates provide a forward-looking view of the company's financial performance. For example, one source indicates revenue is projected to reach $920.2 million in 2024 and $973.4 million in 2025, based on analysts estimates.

Strategic initiatives and partnerships play a crucial role in Knowles' growth trajectory. Collaborations with technology partners and industry leaders can accelerate product development, expand market access, and enhance the company's competitive position.

Knowles possesses several competitive advantages that position it for sustained growth:

• Technological Expertise: The company's deep expertise in micro-acoustics and audio processing provides a strong foundation for innovation.
• Customer Relationships: Knowles maintains long-standing relationships with key customers in diverse markets, ensuring a stable revenue base.
• Global Footprint: The company's global manufacturing and sales presence enable it to efficiently serve customers worldwide.

To give a clearer picture, here's a summary of recent financial highlights:

For additional details on Knowles Corporation's financial health, you can refer to this analysis: Breaking Down Knowles Corporation (KN) Financial Health: Key Insights for Investors