Several months ago, Kornit Digital (Nasdaq: KRNT) CEO Ronen Samuel set an ambitious target for the company of $500 million in annual revenue, compared with its $142 million in 2018. In order to achieve this vision, the company is now expanding its activity in Israel. Sources inform "Globes" that Kornit Digital is building a new factory in Kiryat Gat, a city associated mainly with chip giant Intel's fabs, at an estimated investment of NIS 62 million.
Kornit Digital manufactures digital printing systems for printing on textiles. Its share price has risen 15% this year, pushing its market cap up to $751 million.
The new plant in Kiryat Gat will produce the ink for the company's systems. Kornit Digital expects it to provide infrastructure for its future growth. The plant will cover 11 dunam (2.75 acres), with 6,800 square meters of built-up space. Kornit Digital plans to begin running in of the factory in April 2020, and estimates that one shift there will triple its current output. The plant will have three shifts a day. The building will also contain assembly and repair areas, areas for future technological infrastructure, and offices.
At the conclusion of the cornerstone ceremony for the factory today, Kornit Digital CEO Ronen Samuel said, "One of the aggressive targets we have set for ourselves is to reach $500 million in sales within five years. The ink factory is an important factor that will enable us to reach this target and continue our growth by supporting and achieving production of future technological developments. At the end of the ceremony, we jointly planted an oak tree, which in Jewish tradition symbolizes resilience and strength. Planting the tree symbolizes Kornit Digital's long-term plan and strong link to Israel and its culture."
Kornit Digital currently has 280 employees in Israel (the company's headquarters are in Rosh HaAyin) out of a total workforce of 450.
The $500 million revenue target was presented to the market several months ago in the framework of Kornit Digital's day for analysts, four months after Samuel took up his position, replacing Gabi Seligsohn. In response, Needham investment house analyst James Ricciuti wrote, "We are now more convinced of Kornit Digital's unique status in the textile digital printing market. We believe that Kornit Digital can grow 25% or more in the coming years and enlarge its profit margins."
As of now, seven analysts are covering Kornit Digital's share. Six of them list a positive recommendation for the share and one a neutral recommendation. The analysts' average target price is $23.80, 11% higher than the current share price.
Kornit Digital finished 2018 with $142 million in revenue, 24.8% more than in 2017, and a $13.1 million non-GAAP (excluding accounting items) net profit, 230% higher than in 2017. The company generated $33.4 million from current activity in 2018, and had $128 million in cash at the end of the year.
Published by Globes, Israel business news - en.globes.co.il - on March 6, 2019
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