Kimball Electronics posted second-quarter results that surpassed Wall Street’s revenue and profit expectations, with the market responding positively. Management credited this outcome to sequential sales growth, disciplined cost control, and strong cash flow generation, which enabled further debt reduction. CEO Richard Phillips highlighted the company’s progress in repositioning for profitable growth, citing a notable increase in customer wins and high-quality ratings. Phillips emphasized, “We made significant progress positioning the company for a return to profitable growth with noteworthy accomplishments, including a record number of wins for future business.”

Is now the time to buy KE? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Kimball Electronics’s Q2 Earnings Call

• Michael Roy Crawford (B. Riley Securities) asked about the timing and revenue capacity of the new Indianapolis facility. CEO Richard Phillips said the facility would open in November and could handle "hundreds of millions of dollars” in business.
• Derek John Soderberg (Cantor Fitzgerald) inquired about margin implications from the renewed respiratory care program. CFO Jana Croom said margins would be similar to prior arrangements, with Kimball now handling all final assembly.
• Derek John Soderberg (Cantor Fitzgerald) also pressed on improvements in cash conversion days. Croom explained these gains stemmed from inventory programs, tighter supply chain partnerships, and working capital initiatives.
• Anja Marie Theresa Soderstrom (Sidoti & Company) asked about the drivers of margin improvement and the impact of the new medical facility’s automation. Management highlighted restructuring, capacity utilization, and automation as key factors supporting future margin gains.
• Jaeson Allen Min Schmidt (Lake Street Capital Markets) questioned the sustainability of growth in the medical segment beyond the largest customer. Phillips responded that most new customers in the past two years were in medical and that the company is aggressively pursuing both new and existing customer opportunities.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the ramp-up and customer onboarding at the Indianapolis medical facility, (2) progress in offsetting automotive program losses with new medical and industrial contracts, and (3) further reductions in cash conversion days and improvements in margin from automation and cost controls. Expansion of the medical customer base and execution on new product introductions will also be important signposts for future growth.

Kimball Electronics currently trades at $26.64, up from $21 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

Our Favorite Stocks Right Now

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.