Karat Packaging (NASDAQ: KRT) may not be a household name, but consumers have most likely used their products. The maker of containers, cups, lids, utensils, straws, and food packaging just reported sales growth of almost 14% in Q4.

Investors reacted by sending shares soaring by 17.9% as of 1:35 p.m. ET.

Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »

Karat reported that Q4 sales increased 13.7% year over year. Management also said it expects revenue to increase by up to 10% in Q1 compared with the prior-year quarter. Even amid an unpredictable macroeconomic environment, CEO Alan Yu noted, "We again achieved double-digit volume growth, and our pricing turned positive for the first time since the first quarter of 2023."

The company is navigating the difficult environment by broadly diversifying its sourcing outside of Asia, including South America and the U.S. That is helping the small-cap company through an evolving tariff situation.

Karat offers a diverse product mix, providing customers with convenience. Its eco-friendly packaging is in demand, and the company is innovative, introducing a steady stream of new products.

Beyond its growing sales, the company pays a dividend still yielding almost 7% even after today's stock move. The recent court ruling on tariffs could also result in a refund for the company. While that shouldn't be considered part of an investment thesis, lower future tariffs could provide another tailwind for Karat.

Before you buy stock in Karat Packaging, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Karat Packaging wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $508,607!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,122,746!*

Now, it’s worth noting Stock Advisor’s total average return is 933% — a market-crushing outperformance compared to 188% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.

See the 10 stocks »

*Stock Advisor returns as of March 13, 2026.

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Karat Packaging. The Motley Fool has a disclosure policy.

Why Karat Packaging Stock Soared Today was originally published by The Motley Fool