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ZYBERNO

Stock Report

Updated Aug 30, 2026

Knowles Corporation (KN)

Technology • NYSE

$34.23

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

36.0/100

WEAK BUSINESS

Knowles Corporation (KN) scores 36/100 — weak fundamentals with mixed indicators requiring careful analysis before acting.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full KN quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-20.1%

Market Overestimates

⚠ Significant divergence between Owner Earnings and Free Cash Flow (1.42×). Intrinsic Value and Brina Gap are likely overstated — acquisition-related D&A is inflating Owner Earnings. Verify earnings quality before acting.

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full KN valuation analysis · → View full KN Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):POOR (7.3%)

Debt-to-Equity (Solvency Risk):EXCELLENT (0.19x)

Operating Margin (Operational Efficiency):AVERAGE (13.4%)

Return on Capital (Capital Efficiency):POOR (6.9%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

Knowles Corporation (KN) stock report — Zyberno Score 36/100 (WEAK BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, Knowles Corporation (KN) shows a Brina Gap of -20.1%, which weakens the case: based on the company's ROIC (6.9%) and reinvestment rate (-6.8%), the business can fundamentally grow at -0.5% — but the current enterprise value implies the market expects 19.6%.

Over the trailing twelve months, KN generated $19.30M in Owner Earnings. Capital was deployed as follows: $7.50M returned via share buybacks, $38.90M invested in capital expenditures. Reinvestment rate: -6.8%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:34.23

Market Cap:$2.92B

Valuation Multiples (4)

P/E Ratio:

54.33x

📊 Click to view full KN P/E analysis →

P/B Ratio:3.75x

P/S Ratio:4.76x

Peg Ratio:-999.00x

Enterprise Metrics (2)

Enterprise Value:$3.03B

Ev Ebitda Ratio:23.20x

Price Action & Momentum (3)

12-1 Momentum:

+85.0% (94th pctile)

📈 Click to view full KN Momentum analysis →

Momentum Percentile:94 / 100

% of 52-Week High:79.7%

B. Profitability Assessment

Return Metrics (7)

ROE:

7.3%

📊 Click to view full KN ROE analysis →

ROA:5.2%

Roic:

6.9%

📊 Click to view full KN ROIC analysis →

Reinvestment Rate:-6.8%

Fundamental Growth Rate (g):-0.5%

Market-Implied Growth Rate:19.6%

Brina Gap:

-20.1%

☷ Click to view full KN Brina Gap analysis →

LOW CONF

Margin Analysis (3)

Operating Margin Ttm:13.4%

Net Margin Ttm:9.1%

Ebitda Margin:21.3%

TTM Performance (3)

Gross Margin Ttm:44.0%

Operating Margin Ttm:13.4%

Net Margin Ttm:9.1%

Yield Metrics (3)

Earnings Yield:$1.84

Owner Earnings Yield:$0.66

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Earnings Surprise (SUE) (3)

Earnings Surprise (SUE):

+0.09

📊 Click to view full KN Earnings Surprise analysis →

EPS Surprise vs Expected:224.8%

Latest Earnings Filed:2026-04-28

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):-13.4%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):22.5%

Cash Flow Growth (Linear) (1)

Operating Cash Flow Growth Rate (Linear):-31.4%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):14.9%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:3.27x

Quick Ratio:1.77x

Cash Ratio:0.45x

Leverage Analysis (3)

Debt To Equity Ttm:0.19x

Debt-to-Equity Ratio:0.19x

Debt To Ebitda:1.17x

Coverage Ratios (2)

Interest Coverage Ratio:6.70x

Times Interest Earned:6.70

Capital Structure (4)

Working Capital:206,500,000.00

Cash And Cash Equivalents:41,000,000.00

Long Term Debt:$131.00M

Net Debt:$111.50M

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $614.10M

Linear Growth: -13.4%

📊 Click to view full KN Revenue analysis & methodology →

Cost Of Revenue Ttm:$340.00M

Profitability Breakdown (2)

Gross profit TTM: $270.10M

Linear Growth: -1.7%

📊 Click to view full KN Gross Profit analysis & methodology →

Operating income TTM: $82.20M

Linear Growth: 14.9%

📊 Click to view full KN Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $55.90M

Linear Growth: 22.5%

📊 Click to view full KN Net Income analysis & methodology →

Income Before Tax:$74.20M

Ebitda Ttm:130,800,000.00

Operating Expenses (5)

Operating Expenses:187,900,000.00

R And D Expense:42,200,000.00

Sga Expense:145,000,000.00

Income Tax Expense:$11.60M

Interest Expense:10,500,000.00

Expense Ratios (3)

R And D To Revenue Percentage:27.6%

Sga To Revenue Percentage:94.7%

Ebitda Margin:21.3%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$1.05B

Current Assets:$297.40M

Ppe Net:144,700,000.00

Goodwill:270,300,000.00

Intangible Assets:$137.10M

Liability Structure (4)

Total Liabilities:273,700,000.00

Current Liabilities:90,900,000.00

Long Term Debt:$131.00M

Short Term Debt:$21.50M

Equity & Capital (3)

Equity:$780.20M

Retained Earnings:-$559.70M

Common Stock:400,000,000.00

Working Capital Items (3)

Accounts Receivable:109,200,000.00

Inventory:136,200,000.00

Accounts Payable:44,500,000.00

Special Items (2)

Contract Liabilities:1,300,000.00

Stock Based Compensation:10,400,000.00

C. Cash Flow Analysis

Operating Activities (2)

Operating cash flow TTM: -$2.80M

Linear Growth: -31.4%

-$41.70M

Investment Activities (2)

Investing Cash Flow:-$10.80M

Capital Expenditures Ttm:38,900,000.00

Financing Activities (3)

Financing Cash Flow:-$1.80M

Dividends Paid Ttm:0.00

Stock Repurchase:7,500,000.00

Capital Transactions (3)

Common Stock Issuance:0.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:48,600,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):0.64

Eps diluted TTM: $0.63

Linear Growth: 23.3%

📊 Click to view full KN EPS analysis & methodology →

Earnings Per Share Ttm:$0.65

Revenue & Cash Per Share (2)

Sales Per Share Ttm:7.19

Operating Cash Flow Per Share:-$0.03

Book Value & Capital (2)

Book Value Per Share:$9.14

Cash Per Share:0.48

Dividend Policy (1)

Dividend Payout Ratio:0.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.57x

Working Capital Turnover Ttm:2.97x

Receivables Management (2)

Receivables Turnover Ttm:5.62x

Days Sales Outstanding Ttm:64.90

Inventory Management (2)

Inventory Turnover Ttm:2.50x

Days Inventory Outstanding Ttm:146.21

Payables & Cash Cycle (2)

Days Payable Outstanding:47.77

Cash Conversion Cycle:163.35

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:100.00

Quality Score:70.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $19.30M

Linear Growth: 0.0%

📊 Click to view full KN Owner Earnings analysis & methodology →

Owner Earnings Per Share:$0.23

Owner Earnings Yield:$0.66

Damodaran Growth Analysis (4)

Reinvestment Rate:-6.8%

Fundamental Growth Rate (g):-0.5%

Market-Implied Growth Rate:19.6%

Brina Gap:

-20.1%

☷ Click to view full KN Brina Gap analysis →

LOW CONF

Return Scenarios (1)

Forward Expected Return (Yield + Growth):

0.2%

📊 Click to view full KN expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):-13.4%

Net Income Growth Rate (Linear):22.5%

Operating Income Growth Rate (Linear):14.9%

Cash Flow Growth Rates (1)

Operating Cash Flow Growth Rate (Linear):-31.4%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):-1.7%

Book Value Growth Rate (Linear):-14.2%

C. Company Profile & Context

Corporate Information (6)

Symbol:KN

Company Name:Knowles Corporation

Sector:Technology

Industry:Household Audio & Video Equipment

Exchange:NYSE

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:85.40M

Shares Outstanding Basic:85.40M

Shares Outstanding Diluted:87.70M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-30 18:21:16 UTC

Data Timestamp:2026-08-30T18:21:16.486726