Kimball Electronics fits today's FATTORIALE screen because the stock trades near 0.5x sales and 1.2x book value, shares outstanding are down year over year, debt is at a four-year low and the Helvoet acquisition adds medical CDMO optionality. The upside is not explosive: the base fair value is close to the latest analyst target and depends on FY2027 organic growth, Helvoet integration and sustained working-capital discipline.
EV/EBITDA is primary because KE is profitable but low-margin; P/S and P/B are used only as sanity checks. The bridge starts from reported FY2026 adjusted EBITDA, adds a Helvoet contribution derived from the disclosed transaction multiple, then deducts pro-forma net debt. Not investment advice.
| Component | Assumption | USD/share |
|---|---|---|
| Legacy KE operating EV | $104.4M FY2026 adjusted EBITDA x 7.0x EV/EBITDA / 23.97M shares | +30.49 |
| Helvoet EBITDA contribution | $103M purchase price / 9.0x estimated 2026 EBITDA = $11.4M x 7.5x / 23.97M shares | +3.58 |
| Post-deal net debt | ($116.6M debt - $88.9M cash + $103M Helvoet cash price) / 23.97M shares | -5.45 |
| Cash conversion option | 35% probability x $50M working-capital release as cash conversion days normalize / 23.97M shares | +0.73 |
| Buyback accretion | $11.9M FY2026 repurchase spend / 23.97M shares, credited at cost not at market premium | +0.50 |
| Integration and margin reserve | -$18M reserve for Helvoet integration, customer timing and low-margin EMS execution / 23.97M shares | -0.75 |
| FV base case | Raw bridge equals $29.10; rounded to $32.00 after applying a 7.7x blended EBITDA multiple, still below PLXS/EMS quality peers and aligned with the latest consensus target | $32.00 |
Insider/governance check: recent Form 4 activity included grants/gifts and tax-withholding style transactions; no searched source showed open-market insider sales above the $500K threshold in the last 12 months. Targeted searches did not surface an active securities class action, short-seller report, SEC investigation or shelf equity raise for KE in the last 90 days.
| Item | FY2023 | FY2024 | FY2025 | FY2026 | Guidance / note |
|---|---|---|---|---|---|
| Net sales | ~$1.82B | ~$1.72B | ~$1.49B | $1.431B | FY2026 down 4%; medical +10% normalized |
| Operating income | N/D | N/D | $45.5M | $66.1M | 4.6% margin |
| Adjusted EBITDA | N/D | N/D | $98.3M | $104.4M | 7.3% of sales |
| Operating cash flow | N/D | N/D | N/D | $72.3M | 10th consecutive positive quarter by Q4 |
| Cash / debt | N/D | N/D | N/D | $88.9M / $116.6M | Pre-Helvoet; transaction adds about $103M cash use |
| Metric | Q1 FY26 | Q2 FY26 | Q3 FY26 | Q4 FY26 |
|---|---|---|---|---|
| Revenue ($M) | 365.6 | 341.3 | 352.9 | 371.6 |
| Operating margin | N/D | N/D | N/D | 7.8% |
| Adjusted EBITDA ($M) | N/D | N/D | N/D | 28.2 |
| Cash EOP ($M) | N/D | N/D | N/D | 88.9 |
Business model - EMS platform with medical CDMO option
Medical FY2026 +10% normalized ramping Best vertical in fiscal 2026; Helvoet adds European and India CDMO capabilities in microfluidics, diagnostics and drug delivery. Automotive Cyclical / mixed watch Still a core end market, but auto volumes and customer timing can dilute the higher-quality medical thesis. Industrial Q4 down mid-single digit YoY soft Industrial demand is stabilizing sequentially, but not yet strong enough to make FY2027 growth low-risk.
Legal, regulatory and risk analysis
SWOT analysis
- +Strong cash conversion improvement and lower debt create a cleaner starting point.
- +Medical vertical growth and Helvoet move mix toward higher-value programs.
- +Buybacks reduced the share count during a transition year.
- −Revenue declined in fiscal 2026 and industrial/automotive demand remains uneven.
- −Adjusted EBITDA margin is still too low for a high-quality multiple.
- −Analyst target gap is modest after the recent price recovery.
- →Helvoet can expand the medical CDMO footprint in Europe and India.
- →Further cash-cycle gains could unlock debt paydown and renewed buybacks.
- →A clean Q1 FY2027 guide would support multiple expansion toward EMS peers.
- !Post-deal net debt rises if integration consumes working capital.
- !Auto and industrial customer timing can offset medical momentum.
- !Short interest can pressure shares if Q1 guidance is conservative.
Summary by assessment area
- Cash rose to $88.9M and debt fell to $116.6M before Helvoet.
- Net debt remains manageable even after the acquisition.
- 0.48x sales and 1.18x book screen cheap.
- Base FV is still only $32 because margins are thin.
- The next report must show organic growth plus Helvoet accretion.
- Cash conversion is the most important non-GAAP quality check.
Sources: Kimball Electronics FY2026 Q4/FY results 8-K exhibit filed Aug 2026; Kimball Electronics Helvoet acquisition 8-K dated Jul 1, 2026; StockAnalysis statistics page; MarketBeat stock and short-interest pages; StockScan and FinanceCharts price/market-cap cross-checks; SEC Form 4 search results. Market data as of 2026-10-02 close: KE $28.79; market cap about $690.7M; enterprise value about $734.2M; shares outstanding 23.97M; 52W range $21.01-$32.00; short interest 1.833M shares / 7.87% float / 10.9 days to cover as of Sep 15, 2026. Current price was cross-checked against MarketBeat ($28.79 close), StockScan ($28.79 latest close) and StockAnalysis intraday/close data within normal source tolerance. This document is for informational purposes only and does not constitute financial or investment advice.