Rebuilding Credibility As Fundamentals Slowly Improve

Research evidence excerpt

Rebuilding Credibility As Fundamentals Slowly Improve

UpdateM

Risk Reward – Kornit Digital Ltd. (KRNT.O)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Revenue Growth (Y/Y) (%) 2.1 5.4 5.9 11.2

Gross Margin (%) 47.2 45.3 47.8 46.5

Non-GAAP Operating Margin (%) (4.3) (3.7) (0.5) 4.8

FCF ($M) ($, mm) 3 31 7 18

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

(+) Positive est revisions RISKS TO UPSIDE FY Dec 2026e

Tariffs drive strong demand for onshore/near-

(+) Margins surprise to the upside

shore production Sales / 220

(+) Expansion of key strategic relationships/new Positive mix shift lifts margins Revenue Note: There are not sufficient brokers supplying

accounts AIC opex model drives stronger sales & ($, mm) consensus data for this metric

margins

(-) Financial targets are pushed out DTF growth accelerates

RISKS TO DOWNSIDE 26

(-) Earnings misses EBITDA

Paused system orders end up as cancellations ($, mm) Note: There are not sufficient brokers supplying

(-) Strategic account downsizing given macro weakness consensus data for this metric

Upgrade demand fades & replacement cycles

(-) Persistent margin pressure lengthen

KRNT is unable to fully offset tariffs, weighing 14

on margins EBIT

AIC adoption is limited ($, mm) Note: There are not sufficient brokers supplying

GLOBAL REVENUE EXPOSURE Apollo demand fails to materialize consensus data for this metric

0-10% India

0-10% Latin America OWNERSHIP POSITIONING 0.18

0-10% MEA EPS

Inst. Owners, % Active 74.6% Note: There are not sufficient brokers supplying 0-10% UK ($)

20-30% Europe ex UK HF Sector Long/Short Ratio 1.4x consensus data for this metric

50-60% North America HF Sector Net Exposure 8.8%

Source: Morgan Stanley Research Estimate Mean Morgan Stanley Estimates