Kendrion’s stock closed at €19.28, roughly flat over the past week, even as the quarterly figures put profitability squarely in the spotlight. The headline is not revenue, which came in at €65.4 million, but what the company kept from it. Net income from continuing operations over the trailing twelve months reached €16.7 million, and basic earnings per share for the quarter printed at €0.32. For a stock trading on a P/E of 17.3x and still carrying memories of an unstable dividend record, that profit engine is what investors are really testing against the thesis.

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Q2 2026 Earnings Summary

• Revenue (Q2 2026 vs. Q2 2025): €65.4 million vs. €80.3 million (decline of 18.6%)
• Net Income from Continuing Operations (Q2 2026 vs. Q2 2025): €4.9 million vs. €4.5 million (increase of 8.9%)
• Basic EPS (Q2 2026 vs. Q2 2025): €0.32 vs. €0.29 (increase of 10.6%)
• Net Profit Margin, Trailing 12 Months (to Q2 2026 vs. prior year): 6.5% vs. 2.7% (margin more than doubled)

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Kendrion margin story passes first stress test

Bulls argue that post China divestment Kendrion can run as a tighter industrial group with structurally stronger margins and more reliable earnings. The latest quarter gives some backing to that view. Revenue in Q2 2026 was €65.4 million compared with €80.3 million a year earlier, yet net income from continuing operations edged up to €4.9 million from €4.5 million and basic EPS moved to €0.32 from €0.29. Over the trailing twelve months, net profit margin reached 6.5% compared with 2.7% previously. That pattern, lower sales while earnings and margin improve, is what you would expect if mix, pricing and cost focus in industrial brakes and actuators are starting to work. It does not yet prove the full automation and electrified motion thesis, but it shows Kendrion can protect profitability even when top line is under pressure.

Bear worries on growth and demand not cleared

The main bear worry is that weak industrial capex and slower automation adoption keep Kendrion on a lower growth path, which would cap operating leverage and question the reinvestment story. The 18.6% revenue decline in Q2 2026 compared with Q2 2025 keeps that concern alive. Margin gains to 6.5% over the past year compared with 2.7% previously help earnings quality, yet they come against a shrinking revenue base. Share performance also reflects some of that hesitation. The stock is roughly flat over 7 days, modestly up about 3.5% over 30 days, but down about 9.9% over 90 days. That pattern suggests investors are not treating this print as a clear inflection in demand or growth visibility, even if cost and portfolio measures are easing some of the more severe downside fears.

After an 18.6% revenue decline and a history of dividend instability, it is fair to ask whether Kendrion’s recent margin progress is the full story or just one visible piece of a deeper risk profile. Review our independent risk analysis for Kendrion which shows 1 important warning sign

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.