KMDA

We rate KAMADA LTD (KMDA) as a Buy with a composite score of 69.8/100 at a current price of $9.19. The stock scores above average across the majority of our six quantitative factors and ranks #98 out of 7,333 stocks in our universe, reflecting a favorable risk-reward profile.

The rating is primarily driven by strength in value (93th percentile) and quality (80th percentile), which together account for the majority of the composite score. All factors score above the 40th percentile, indicating no material weakness in the quantitative profile. We assign a Narrow Moat rating (56/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

KAMADA LTD holds a lower-quartile position (#48 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 69.8/100 places it at rank #98 in our full 7,333-stock universe. At $350M in market capitalization, KAMADA LTD is a small-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 13%, though momentum at the 55th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 43% (+1.0pp vs sector) narrow to operating margins of 12% (+11.2pp vs sector) and net margins of 9.0%, yielding a gross-to-net conversion rate of 21%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $9.19, KAMADA LTD appears undervalued relative to its fundamentals. Our value factor score of 93/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. The stock screens as attractively priced on a majority of these measures, suggesting the market may be underappreciating the underlying fundamentals.

The stock currently trades at a P/E of 35.5x (a 60% premium to the sector median of 22.3x), EV/EBITDA of 3.1x (discounted to peers), P/B of 2.0x, P/S of 0.8x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis partially supports given strong quality metrics.

We assign a Low uncertainty rating to KAMADA LTD. The company exhibits strong financial stability with a beta of 0.84, conservative leverage (4% D/E), and a stability factor in the 74th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

We identify no major risk factors at this time. The company's stability factor sits at the 74th percentile with quality at the 80th percentile, both of which support our low-risk assessment. The absence of material leverage, profitability, or volatility concerns reduces the likelihood of a permanent capital loss scenario.

Key risk mitigants include: healthy gross margins of 43% provide a buffer against cost pressures; conservative leverage (4% D/E) limits balance sheet risk; above-average stability (74th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate KAMADA LTD's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by returns on equity of 22.3%, disciplined leverage (4% D/E). Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — KAMADA LTD meets this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. We note that the combination of 15.5% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, KAMADA LTD receives a Buy rating with a composite score of 69.8/100 (rank #98 of 7,333). Our quantitative framework assigns a Narrow Moat (56/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 70/100.

Our analysis supports a constructive view on KAMADA LTD. The combination of identifiable competitive advantages, low uncertainty, and exemplary capital allocation creates a risk-reward profile that favors accumulation at current levels. We recommend investors consider adding this name to portfolios aligned with the stock's risk profile.