NEW YORK, March 4, 2023 /PRNewswire/ — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) KRNT It reminds investors about the April 17, 2023 Deadline to apply for the position of lead plaintiff in the federal securities class action against the Company
If you have suffered losses exceeding $100,000 Investing in Kornit stock options or stock between February 17, 2021 And July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson You can contact directly At 877-247-4292 Oder 212-983-9330 (Ext. 1310). For more information, click here www.faruqilaw.com/KRNT.
There are no costs or obligations.
Faruqi & Faruqi is a leading minority And Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.
Kornit develops and manufactures digital printing solutions for textile, garment, and apparel industries. The unique eco-friendly technology used by Kornit’s digital inkjet printers allows them to print directly on finished garments as well as large rolls of unfinished material.
The Company’s revenues come from the sale of its printing systems, as well as textile inks or other consumables for its digital printers. Kornit offers customer support and equipment services to its end-users. This includes technical support, maintenance, repair, and technical support. Kornit also expanded its business during the Class Period and started offering software services to customers. This includes a suite end-to-end fulfillment solutions and production solutions called KornitX. The Company offers, among others, automated production systems, workflow, and inventory management.
Amazon.com, Inc. is Kornit’s largest customer. The Company had other major customers during the Class period, including Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit’s ten largest customers account for more than 60% of its revenue. Kornit generates a large portion of its revenues from its largest customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of generating 80% of its revenue. $1 Billion By 2026, revenue will increase by 6%
The complaint alleges that during the Class Period, defendants made many materially false or misleading statements and omissions regarding Kornit’s business and operations. Particularly, Defendants repeatedly praised Kornit’s technological advantages and promised investors that they faced little competition in “direct-to–garment” printing. Investors were assured that Kornit’s digital printers and other consumable products such as textile inks are in strong demand. Defendants also stated that the Company offers services to its customers to help manage and maintain their digital printers. Investors were also assured by Defendants that Kornit’s strong demand for its products and services would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of its revenues being concentrated in a few large customers.
In truth, defendants knew, or at the very least, disregard, that Company’s digital printing business was plagued in quality control and customer service issues. Kornit was forced to give market share to rivals due to these problems and deficiencies. Customers went elsewhere for digital printing services, which in turn led to a drop in Company revenue. Because of the misrepresentations by Defendants, Kornit’s ordinary shares were traded at artificially high prices throughout the Class Period.
Investors started to realize the truth. March 28, 2022, when Delta Apparel and Fanatics—two of Kornit’s major customers—announced that for months they had collaborated with one of Kornit’s principal competitors to develop a new digital printing technology that directly competed with Kornit’s products and services. Kornit would lose revenue from two of the most important customers.
On May 11, 2022Kornit reported a net loss in spite of reporting revenue that exceeded expectations. $5.2 Million For the first quarter in 2022, it was a profit of $5.1 Million In the previous year period. The revenue guidance issued by the Company for its second quarter in 2022 was also significantly below analysts’ estimates. Kornit blamed the disappointing guidance on a slowdown of orders from customers in e-commerce. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors. These disclosures led to a decline in the Kornit share price $18.78 Per share or 33%
Then, on July 5, 2022Kornit declared that it would report significant revenue loss for the second quarter in 2022. Kornit forecasted that revenue for the quarter would be between $1.01 and $1.02. $56.4 Million To $59.4 millionsThis is much lower than the revenue guidance for between $85 Million And $95 million The Company had provided less than two months prior to the revenue miss. Kornit stated that the significant revenue decline was due to “a substantially slower pace of direct to-garment (DTG), systems orders in quarter two than our expectations.” These disclosures led to a further decline in the Kornit share price $8.10 Each share is 25.7%
The court-appointed lead plaintiff, who has the greatest financial interest in the relief sought for the class and is typical of class members, directs and supervises the litigation on behalf the putative class. Any member or potential class member may petition the Court to be appointed lead plaintiff by counsel of their choosing, or they may remain absent and choose not to act. Your right to share in any recovery does not change by whether you are chosen to be a lead plaintiff.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Kornit’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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