Kornit Digital's (KRNT) Q2 financial results show that momentum is building, although greater proof of durability is needed to become more constructive as H2 revenue growth and gross margins moderate, Morgan Stanley said in a note Wednesday.
The investment firm cited Q2 revenue growth reaching a 17-quarter high and Services growth of 35%, partly driven by upgrades from Amazon.com (AMZN), a large strategic customer, among the several data points that highlight momentum.
Management also highlighted shortening sales cycles, strong adoption of the all-inclusive click model and new systems among customers in Europe, Asia, and the US, and the accelerating penetration of the screen printing market, pointing to stronger execution and a pickup in analog-to-digital transition despite a mixed apparel market, according to the note.
The firm said it now expects 2026 and 2027 revenue of $223 million and $240 million, respectively, up 2% to 3% from prior estimates.
Morgan Stanley kept an equal-weight rating on Kornit Digital and raised its price target to $19 from $18.
Shares of Kornit Digital were up 4.4% in Thursday trading.
Price: $18.41, Change: $+0.77, Percent Change: +4.37%