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Relative valuation derived from Materials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
11.7%
Sector: 3.3%
Dividend Analysis audit
INCOME
3.99%
Trailing Yield
$3.99
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
89%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, KAISER ALUMINUM CORP (KALU) receives a "Hold" rating with a composite score of 53.1/100, ranked #253 out of 4446 stocks. Key factor scores: Quality 50/100, Value 69/100, Momentum 70/100. This is quantitative analysis only — not investment advice.
KAISER ALUMINUM CORP (KALU) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does KAISER ALUMINUM CORP Do?
Kaiser Aluminum Corporation engages in manufacture and sale of semi-fabricated specialty aluminum mill products in the United States and internationally. The company offers rolled, extruded, and drawn aluminum products used for aerospace and defense, aluminum beverage and food packaging, automotive and general engineering products. The company's automotive extrusions include extruded aluminum products for structural components, crash management systems, anti-lock braking systems, and drawn tubes for drive shafts, as well as offers fabrication services, including sawing and cutting to length. Its packaging products consist of bare and coated 3000- and 5000-series alloy aluminum coil used for beverage and food packaging industry; and Its general engineering products comprise alloy plate, sheet, rod, bar, tube, wire, and standard extrusion shapes used in various applications, including the production of military vehicles, ordnances, semiconductor manufacturing cells, electronic devices, after-market motor sport parts, tooling plates, parts for machinery and equipment, bolts, screws, nails, and rivets. In addition, it offers rerolled, extruded, drawn, and cast billet aluminum products for industrial end uses. It sells its products directly to customers through sales personnel located in the United States, Canada, Western Europe, and China, as well as through independent sales agents in other regions of Asia, Latin America, and the Middle East. The company was founded in 1946 and is headquartered in Foothill Ranch, California. KAISER ALUMINUM CORP (KALU) is classified as a mid-cap stock in the Materials sector, specifically within the Steel Works industry. The company is led by CEO Keith A. Harvey and employs approximately 4,000 people, headquartered in FOOTHILL RANCH, Tennessee. With a market capitalization of $2.1B, KALU is one of the notable companies in the Materials sector.
KAISER ALUMINUM CORP (KALU) Stock Rating — Hold (April 2026)
As of April 2026, KAISER ALUMINUM CORP receives a Hold rating with a composite score of 53.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.KALU ranks #253 out of 4,446 stocks in our coverage universe. Within the Materials sector, KAISER ALUMINUM CORP ranks #13 of 284 stocks, placing it in the top 10% of its Materials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
KALU Stock Price and 52-Week Range
KAISER ALUMINUM CORP (KALU) currently trades at $142.67. The stock gained $0.63 (0.4%) in the most recent trading session. The 52-week high for KALU is $150.00, which means the stock is currently trading -4.9% from its annual peak. The 52-week low is $46.80, putting the stock 204.8% above its annual trough. Recent trading volume was 106K shares, suggesting relatively thin trading activity.
Is KALU Overvalued or Undervalued? — Valuation Analysis
KAISER ALUMINUM CORP (KALU) carries a value factor score of 69/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 22.22x, compared to the Materials sector average of 26.50x — a discount of 16%. The price-to-book ratio stands at 2.59x, versus the sector average of 2.83x. The price-to-sales ratio is 0.67x, compared to 0.74x for the average Materials stock. On an enterprise value basis, KALU trades at 11.28x EV/EBITDA, versus 6.01x for the sector.
Overall, KALU's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
KAISER ALUMINUM CORP Profitability — ROE, Margins, and Quality Score
KAISER ALUMINUM CORP (KALU) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 11.7%, compared to the Materials sector average of 3.3%, which is within a healthy range. Return on assets (ROA) comes in at 3.8% versus the sector average of 0.6%.
On a margin basis, KAISER ALUMINUM CORP reports gross margins of 12.3%, compared to 29.8% for the sector. The operating margin is 4.5% (sector: 6.0%). Net profit margin stands at 3.0%, versus 3.0% for the average Materials stock. Revenue growth is running at 9.1% on a trailing basis, compared to 1.8% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
KALU Debt, Balance Sheet, and Financial Health
KAISER ALUMINUM CORP has a debt-to-equity ratio of 210.0%, compared to the Materials sector average of 41.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. The current ratio is 2.95x, indicating strong short-term liquidity. Total debt on the balance sheet is $1.04B. Cash and equivalents stand at $17M.
KALU has a beta of 1.35, meaning it is more volatile than the broader market — a $10,000 investment in KALU would be expected to move 34.6% more than the S&P 500 on any given day. The stability factor score for KAISER ALUMINUM CORP is 49/100, reflecting average volatility within the normal range for its sector.
KAISER ALUMINUM CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, KAISER ALUMINUM CORP reported revenue of $3.19B and earnings per share (EPS) of $6.96. Net income for the quarter was $96M. Gross margin was 12.3%. Operating income came in at $146M.
In FY 2025, KAISER ALUMINUM CORP reported revenue of $3.37B and earnings per share (EPS) of $6.96. Net income for the quarter was $113M. Gross margin was 13.1%. Revenue grew 11.5% year-over-year compared to FY 2024. Operating income came in at $189M.
In Q3 2025, KAISER ALUMINUM CORP reported revenue of $844M and earnings per share (EPS) of $2.44. Net income for the quarter was $40M. Gross margin was 13.6%. Revenue grew 12.8% year-over-year compared to Q3 2024. Operating income came in at $49M.
In Q2 2025, KAISER ALUMINUM CORP reported revenue of $823M and earnings per share (EPS) of $1.44. Net income for the quarter was $23M. Gross margin was 12.2%. Revenue grew 6.4% year-over-year compared to Q2 2024. Operating income came in at $38M.
Over the past 8 quarters, KAISER ALUMINUM CORP has demonstrated a growth trajectory, with revenue expanding from $773M to $3.19B. Investors analyzing KALU stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
KALU Dividend Yield and Income Analysis
KAISER ALUMINUM CORP (KALU) currently pays a dividend yield of 4.0%. At this yield, a $10,000 investment in KALU stock would generate approximately $$399.00 in annual dividend income. This compares to the Materials sector average dividend yield of 0.5%, meaning KALU offers above-average income for its sector.
KALU Momentum and Technical Analysis Profile
KAISER ALUMINUM CORP (KALU) has a momentum factor score of 70/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 29/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 26/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
KALU vs Competitors — Materials Sector Ranking and Peer Comparison
Comparing KALU against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full KALU vs S&P 500 (SPY) comparison to assess how KAISER ALUMINUM CORP stacks up against the broader market across all factor dimensions.
KALU Next Earnings Date
No upcoming earnings date has been announced for KAISER ALUMINUM CORP (KALU) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy KALU? — Investment Thesis Summary
KAISER ALUMINUM CORP presents a balanced picture with arguments on both sides. The value score of 69/100 suggests attractive pricing relative to fundamentals. Price momentum is positive at 70/100, suggesting the trend favors buyers.
In summary, KAISER ALUMINUM CORP (KALU) earns a Hold rating with a composite score of 53.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on KALU stock.
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Institutional Research Dossier
KAISER ALUMINUM CORP (KALU) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Kaiser Aluminum (KALU) currently holds a BCR Action Rating of Hold, a position that appears justified given the company's mixed financial performance and moderate valuation. While Kaiser Aluminum exhibits some attractive valuation metrics compared to its sector, particularly in P/E and EV/EBITDA, its free cash flow generation is concerning, and its high debt levels present a significant risk. The company's ability to consistently generate positive free cash flow and manage its debt will be crucial in determining its future performance and justifying a more bullish outlook.
The company's strengths lie in its revenue growth, which surpasses the sector average, and its relatively high ROE. However, these positives are counterbalanced by lower gross and operating margins compared to its peers, and a recent negative free cash flow. The Hold rating reflects the balance between these positive and negative factors, suggesting that investors should remain cautious and monitor the company's progress in improving its financial health and cash flow generation before considering a more aggressive investment stance.
Business Strategy & Overview
Kaiser Aluminum Corporation operates as a manufacturer and seller of semi-fabricated specialty aluminum mill products, serving a diverse range of industries including aerospace and defense, beverage and food packaging, automotive, and general engineering. The company's strategy revolves around providing customized aluminum solutions to meet the specific needs of its customers, focusing on high-value applications where performance and reliability are critical. This approach allows Kaiser Aluminum to differentiate itself from commodity aluminum producers and capture higher margins.
The company's revenue streams are diversified across various end markets, which helps to mitigate the impact of cyclical downturns in any single industry. For example, strong demand in the aerospace and defense sectors can offset weakness in the automotive or packaging industries. Kaiser Aluminum's direct sales force and independent sales agents provide broad market coverage, enabling the company to reach customers in key geographic regions, including the United States, Canada, Western Europe, and China.
Kaiser Aluminum's strategic positioning involves focusing on specialty aluminum products that require advanced manufacturing capabilities and technical expertise. This allows the company to command premium pricing and maintain a competitive edge. The company also offers fabrication services, such as sawing and cutting, which adds value for customers and strengthens its relationships. By providing a comprehensive suite of products and services, Kaiser Aluminum aims to be a preferred supplier for its target markets.
The company's product pipeline likely involves continuous improvement and innovation in its existing product lines, as well as the development of new aluminum alloys and manufacturing processes to meet evolving customer needs. Kaiser Aluminum's success depends on its ability to adapt to changing market dynamics, invest in research and development, and maintain strong relationships with its customers. The company's focus on high-value applications and customized solutions positions it well for long-term growth in the specialty aluminum market.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
9.1%
Sector: 1.8%
+418% VS SCTR
Economic Moat Analysis
Kaiser Aluminum's economic moat can be classified as Narrow. The company possesses some competitive advantages, but they are not strong enough to warrant a Wide moat rating. The primary sources of its narrow moat are likely derived from product differentiation and customer relationships, particularly in specialized applications.
In the aerospace and defense sectors, Kaiser Aluminum's ability to meet stringent quality standards and provide customized solutions creates a degree of customer stickiness. These industries often require specialized alloys and precise manufacturing processes, which are not easily replicated by competitors. This creates a barrier to entry and allows Kaiser Aluminum to maintain its market share.
However, the aluminum industry is inherently cyclical and subject to commodity price fluctuations. This limits Kaiser Aluminum's ability to consistently generate high returns on invested capital. While the company focuses on specialty products, it still faces competition from other aluminum producers and alternative materials. The company's gross margins, while improved recently, still lag the sector average, indicating a lack of significant pricing power.
Furthermore, the company's reliance on specific end markets, such as aerospace and defense, exposes it to risks associated with changes in government spending and industry trends. While diversification across multiple sectors helps to mitigate this risk, it does not eliminate it entirely. The company's ability to maintain its narrow moat will depend on its continued investment in research and development, its ability to adapt to changing customer needs, and its success in managing its cost structure.
The absence of a wide moat is further supported by the lack of significant network effects or switching costs for customers. While customer relationships are important, customers can switch to alternative suppliers if they offer better pricing or product performance. The company's intangible assets, such as patents and trademarks, are not strong enough to create a sustainable competitive advantage. Efficient scale is also not a significant factor, as the aluminum industry is characterized by numerous players of varying sizes.
Financial Health & Profitability
Kaiser Aluminum's financial health presents a mixed picture. The company's revenue has shown growth, with TTM revenue at $3.37 billion, up from $3.02 billion in FY2024 and $3.09 billion in FY2023. This indicates a positive trend in sales. However, the company's profitability metrics, such as gross margin and operating margin, are lower than the sector averages. The TTM gross margin is 12.3% compared to the sector average of 30.2%, and the operating margin is 4.5% compared to the sector average of 6.0%. This suggests that Kaiser Aluminum is less efficient in converting revenue into profit compared to its peers.
The company's ROE of 11.7% is significantly higher than the sector average of 2.7%, indicating that Kaiser Aluminum is effectively utilizing equity to generate profits. However, this metric should be viewed in the context of the company's high debt levels. The debt-to-equity ratio is 210.00, which is substantially higher than the sector average of 40.00. This high leverage increases the company's financial risk and makes it more vulnerable to economic downturns.
A concerning aspect of Kaiser Aluminum's financial health is its negative free cash flow of $-128.97 million. This indicates that the company is not generating enough cash from its operations to cover its capital expenditures and other cash outflows. This negative free cash flow could put pressure on the company's liquidity and its ability to invest in future growth opportunities. The company's total cash balance is relatively low at $17.20 million, which further exacerbates the liquidity concerns.
Analyzing the quarterly financial history reveals some volatility in the company's performance. While revenue has generally been increasing, net income and operating margins have fluctuated. The company's ability to consistently generate positive free cash flow and improve its profitability metrics will be crucial in determining its long-term financial health. The current ratio of 2.95 suggests short-term liquidity is not an immediate concern, but the high debt load and negative free cash flow warrant close monitoring.
Valuation Assessment
Kaiser Aluminum's valuation presents a somewhat compelling case when compared to its sector, but a deeper dive reveals some caveats. The company's P/E ratio of 15.4x is significantly lower than the sector average of 26.1x, suggesting that the stock is undervalued relative to its earnings. Similarly, the EV/EBITDA ratio of 2.3x is substantially lower than the sector average of 5.2x, further indicating potential undervaluation. These metrics might initially attract value investors.
However, it's crucial to consider the context of these multiples. The company's negative free cash flow raises concerns about the sustainability of its earnings. While the P/E ratio is based on net income, the lack of free cash flow suggests that the company may be relying on accounting profits rather than actual cash generation. This could indicate that the earnings are not as high quality as the P/E ratio suggests.
Furthermore, the company's high debt levels need to be factored into the valuation. While the low EV/EBITDA ratio might seem attractive, it's important to remember that enterprise value includes debt. The company's high debt burden increases its financial risk and could limit its future growth potential. A more conservative valuation approach would involve discounting the company's earnings to account for its high leverage and negative free cash flow.
Given the mixed signals from the valuation metrics, it's difficult to definitively conclude whether the stock is cheap, fair, or expensive. The low P/E and EV/EBITDA ratios suggest potential undervaluation, but the negative free cash flow and high debt levels warrant caution. A fair valuation would likely be somewhere in the middle, reflecting the balance between these positive and negative factors. Investors should carefully consider the company's financial health and its ability to generate positive free cash flow before making an investment decision. A discounted cash flow analysis, incorporating conservative assumptions about future growth and free cash flow generation, would be a useful tool for determining a more precise valuation.
Risk & Uncertainty
Kaiser Aluminum faces several specific risks that could negatively impact its business and financial performance. One of the most significant risks is the cyclical nature of the aluminum industry. Demand for aluminum products is closely tied to economic growth, and downturns in key end markets, such as aerospace, automotive, and construction, could lead to a decline in sales and profitability. The company's reliance on these cyclical industries makes it vulnerable to economic fluctuations.
Another key risk is the volatility of aluminum prices. Aluminum is a commodity, and its price is subject to supply and demand dynamics, as well as geopolitical events. Fluctuations in aluminum prices can impact the company's margins and profitability. While Kaiser Aluminum may use hedging strategies to mitigate this risk, these strategies are not always effective and can sometimes result in losses.
The company's high debt levels also pose a significant risk. The debt-to-equity ratio of 210.00 is substantially higher than the sector average, which increases the company's financial risk. High debt levels can limit the company's ability to invest in future growth opportunities and make it more vulnerable to economic downturns. The company's negative free cash flow further exacerbates this risk, as it may need to borrow more money to fund its operations.
In addition, Kaiser Aluminum faces competition from other aluminum producers and alternative materials. The aluminum industry is highly competitive, and the company must constantly innovate and improve its products and services to maintain its market share. The emergence of new materials, such as composites and plastics, could also pose a threat to the company's business.
Bulls Say / Bears Say
The Bull Case
BULL VIEWKaiser Aluminum's low P/E and EV/EBITDA ratios compared to the sector suggest it is undervalued, offering significant upside potential as the market recognizes its true worth.
BULL VIEWThe company's focus on specialty aluminum products and its strong relationships with customers in the aerospace and defense sectors provide a competitive advantage and a stable source of revenue.
BULL VIEWRecent revenue growth indicates a positive trend, suggesting that Kaiser Aluminum is successfully capturing market share and benefiting from increased demand for its products.
The Bear Case
BEAR VIEWKaiser Aluminum's negative free cash flow and high debt levels raise serious concerns about its financial health and ability to sustain its operations in the long term.
BEAR VIEWThe company's gross and operating margins are significantly lower than the sector average, indicating a lack of pricing power and inefficient cost management.
BEAR VIEWThe cyclical nature of the aluminum industry and the volatility of aluminum prices expose Kaiser Aluminum to significant risks that could negatively impact its profitability.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score KALU and 4,400+ other equities.
KAISER ALUMINUM CORP exhibits a 13% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
3.8%
Sector: 0.6%
Gross Margin
Pricing power and cost efficiency
12.3%
Sector: 29.8%
Operating Margin
Core business profitability
4.5%
Sector: 6.0%
Net Margin
Bottom-line profitability
3.0%
Sector: 3.0%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.49%
Yield Delta+714%
Income Projection audit
A $10,000 investment would generate approximately $399 annually in dividends at the current trailing rate.
