KORNIT DIGITAL LTD. (NASDAQ: KRNT) SHAREHOLDER CLASS ACTION

Did you lose any money from investments in Kornit Digital Visit Kornit Digital Ltd. Contact Kornit Digital Ltd. Peter Allocco at (212) 951-2030 or [email protected] to discuss your rights.

NEW YORK, March 06, 2023 (GLOBE NEWSWIRE) — Bernstein Liebhard LLP, a nationally acclaimed investor rights law firm, reminds investors of the deadline to file a lead plaintiff motion in a securities class action lawsuit that has been filed on behalf of investors who purchased or acquired the ordinary shares of Kornit Digital Ltd. (“Kornit” or the “Company”) (NASDAQ: KRNT) between February 17, 2021 and August 5, 2022, inclusive (the “Class Period”). The lawsuit was filed in the United States District Court for the District of New Jersey.

Kornit is a manufacturer of industrial digital printing technologies that are used in the textile, garment, and apparel industries. The Company’s digital inkjet printers enable end-users to print both direct-to-garment (“DTG”) and direct-to-fabric (“DTF”). DTG printing allows designs and images to be printed directly on finished textiles, such as apparel and clothing. In DTF printing, large rolls of fabric pass through wide inkjet printers that print images and designs directly on to swaths of fabric that are then cut and sewn into a product, and can be used in the fashion and home décor industries. Kornit also sells textile inks, and other consumables to use with its digital printers. Kornit provides technical support and customer service for its printers through customer support agreements.

Kornit repeatedly emphasized the apparent competitive advantages of its technology throughout the Class Period and assured investors that there was virtually no competition in DTG printing. Kornit also claimed that customers were in high demand for its digital printing products and consumables such as textile dyes. Kornit also provided services to help them maintain their digital printers and manage customer workflows. Kornit further assured investors that the purportedly strong demand for the Company’s products and services would enable it to maintain its existing customer base and attract new customers that would limit the risks associated with a substantial portion of its revenues being concentrated among a small number of large customers.

Plaintiff claims that similar statements were made during the Class Period. In truth, Kornit and its senior executives knew, or at a minimum, recklessly disregarded, that the Company’s digital printing business was plagued by severe quality control problems and customer service deficiencies. Those problems and deficiencies caused Kornit to cede market share to competitors, which, in turn, led to a decrease in the Company’s revenue as customers went elsewhere for their digital printing needs. Because of these false representations, Kornit ordinary shares were traded at artificially elevated prices throughout the Class Period.

Investors began to learn the truth on 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 products and services Kornit offered. Delta Apparel said that it had installed the new technology in four existing digital printing facilities and was planning to expand. The utilization of this new, competing technology by Delta Apparel and Fanatics reflected the widespread dissatisfaction of Kornit’s major customers with the Company’s product quality and customer service, and meant that Kornit would likely lose revenue from two of its most important customers.

Kornit reported a net profit of $5.1million for the year 2022. However, it reported revenue that was higher than expected. The Company also issued revenue guidance for the second quarter of 2022 that was significantly below analysts’ expectations. Kornit attributed its disappointing guidance to a slowdown in orders from the Company’s customers in the e-commerce segment. The Company also admitted that it knew for at least two quarters that Delta Apparel had purchased digital printing systems from Kornit competitors.

The price of Kornit ordinary stock shares fell $18.78, or 33.3% to close at $37.63 per sa on May 11, 2022.

Kornit then announced that it would report a significant revenue shortfall for the second quarter 2022 on July 5, 2022 after the market had closed. Kornit forecasted that revenue for the second quarter would be between $56.4 million and $59.4 millions. This is far below the $85 million to $95 million revenue guidance the Company gave less than two months ago, in May 2022. Kornit attributed the substantial revenue miss to “a significantly slower pace of direct-to-garment (DTG) systems orders in the second quarter as compared to our prior expectations.”

The price of Kornit ordinary stock shares dropped $8.10, or 25.7% to close at $23.46 per sa on July 6, 2022.

You must apply to the Court by no later than April 30, if you want to be named as lead plaintiff April 17, 2023. A lead plaintiff is an individual who represents other class members and acts as a mediator in the direction of litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you decide to not take action, you can remain an absent class member.

If you Kornit ordinary shares purchased or acquired, and/or you would like to discuss legal rights and options Kornit Digital Ltd. Contact Kornit Digital Ltd. Peter Allocco at (212) 951-2030 or [email protected].

Bernstein Liebhard LLP has recouped over $3.5 billion for clients since 1993. The Firm represents individual investors and has also been retained by the nation’s largest pension funds to monitor their assets and to pursue litigation for them. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.

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Contact Information

Peter Allocco
Bernstein Liebhard LLP
https://www.bernlieb.com
(212) 951-2030
[email protected]