Kennametal (KMT) Stock Analysis & Winston Score

Kennametal makes cutting tools and wear-resistant materials used in factories around the world. Its products — like drill bits, milling inserts, and carbide-coated components — help manufacturers cut, shape, and grind metal, rock, and other hard materials. The company sells to industries including aerospace, automotive, energy, and mining, and has been making these industrial tools for over 85 years.

Kennametal earns revenue by selling tools and engineered components directly to manufacturers and through distributors. It operates globally, with significant business in North America, Europe, and Asia, and generates roughly $2 billion in annual sales. Its competitive edge comes from materials science expertise and a broad product portfolio that would be costly for customers to replace. The main risk is that demand for its tools closely follows industrial production cycles, meaning a slowdown in manufacturing or aerospace spending can quickly pressure sales and margins.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+21.8% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

+85.4% YoY

YoY Growth Rate

EPS growth accelerating

Insider Activity

0.9%ownership

Relatively low insider ownership

Cash Runway

~15 months

$107M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Adequate runway but may need to raise capital within 2 years

Growth context

Kennametal is growing revenue at 22% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

34.7%

Modest — 34.7% gross margin

Operating Margin

13.8%

Healthy — 13.8% operating margin

ROCE

4.1%

Weak — 4.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+4.2%

Slow sales growth (4.2% YoY)

EPS YoY

+51.2%

Earnings growing fast (51.2% YoY)

Earnings growing 25%+ a year. The compounder zone.

EPS Consistency

6/8 quarters

Earnings grew in most of the last 8 quarters

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Cash Flow

Cash Conversion

110%

Turns 110% of profit into real cash

FCF Margin

3.9%

Thin free cash flow (3.9%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.46

Conservative — low debt load (0.46)

Interest Cover

8.51x

Comfortably covers interest (8.5x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

19.4x

no trend

Fair value — P/E 19.4

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

N/A

not available

Data not available

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Dividends

Not applicable for this business.

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