| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 36.54 | 21 |
| Intrinsic value (DCF) | 11.96 | -60 |
| Graham-Dodd Method | 26.17 | -13 |
| Graham Formula | n/a |
Kimball Electronics, Inc. (NASDAQ: KE) is a leading contract electronics manufacturing services (EMS) provider specializing in diversified manufacturing solutions for the automotive, medical, industrial, and public safety sectors. Founded in 1961 and headquartered in Jasper, Indiana, the company offers end-to-end services, including design support, supply chain management, rapid prototyping, and product lifecycle management. With a global footprint spanning the U.S., China, Mexico, Poland, Romania, Thailand, and Vietnam, Kimball Electronics leverages its expertise in printed circuit board assemblies, medical device manufacturing, and automation to serve a broad client base. The company’s focus on industrialization, reliability testing, and precision engineering positions it as a trusted partner in high-growth industries. As part of the industrials sector, Kimball Electronics plays a critical role in enabling innovation across healthcare, automotive electrification, and industrial automation, making it a key player in the EMS industry.
Kimball Electronics presents a mixed investment profile. On the positive side, the company operates in high-growth end markets like automotive and medical devices, supported by a diversified global manufacturing footprint. Its revenue of $1.71B and positive net income of $20.5M in the latest fiscal year reflect stable demand. However, the company’s thin margins (EPS of $0.81) and lack of dividend payments may deter income-focused investors. Additionally, its beta of 1.112 suggests higher volatility compared to the broader market. While its strong operating cash flow ($73.2M) and manageable debt ($294.8M) provide financial flexibility, investors should weigh its exposure to supply chain risks and competitive pressures in the EMS industry.
Kimball Electronics competes in the highly fragmented EMS industry, where differentiation hinges on technical expertise, global scalability, and cost efficiency. The company’s competitive advantage lies in its diversified end-market exposure, particularly in automotive and medical devices, which are less cyclical than consumer electronics. Its vertically integrated services—from design to production—allow for deeper customer engagement and higher-value contracts. However, Kimball faces intense competition from larger EMS providers like Flex and Jabil, which benefit from greater economies of scale and broader geographic reach. While Kimball’s focus on niche markets (e.g., medical disposables, industrial automation) helps mitigate direct competition, its smaller size limits its ability to compete on pricing for high-volume contracts. The company’s strategic investments in automation and Southeast Asian operations (Thailand, Vietnam) enhance cost competitiveness, but reliance on outsourced manufacturing in China and Mexico exposes it to geopolitical and tariff risks. Overall, Kimball’s positioning as a mid-tier EMS player with specialized capabilities offers stability but may constrain rapid growth in a capital-intensive industry.