Knowles Cor

Ariel Investments' Small Cap Value Fund highlighted Knowles Corporation in its second-quarter 2026 investor letter, citing a strong earnings report that exceeded revenue and profit expectations. The fund noted that performance was propelled by solid execution across segments, with Precision Devices benefiting from robust demand and MedTech & Specialty Audio delivering steady results with attractive margins. Knowles also continued returning capital to shareholders through share repurchases. The fund believes the company remains well positioned due to its focus on high-value, niche markets and improving operational execution. Knowles stock closed at approximately $36.08 per share on July 31, 2026, with a market capitalization of about $3.125 billion.

Knowles Corporation raised its full-year 2026 revenue growth forecast to between 10% and 12%, well above the high end of its prior 4% to 6% organic growth target. The company reported second-quarter revenue of $167 million and earnings per share of $0.33, with Precision Devices segment orders reaching nearly $140 million and a book-to-bill ratio of 1.4. Management highlighted a $15 million-plus radar order expected to ship over 36 months starting in 2027, reflecting growing defense demand and multiyear customer commitments. For the third quarter, Knowles guided revenue of $167 million to $177 million and earnings per share of $0.34 to $0.38, while noting a modest headwind in the Medtech and Specialty Audio segment in the fourth quarter due to earlier inventory building.

Knowles Corporation has earned a Zacks Rank #1 (Strong Buy) as it benefits from rising demand for voice-enabled technologies across smartphones, earbuds, smart speakers, wearables, and IoT devices. The company has transformed from a component supplier to an integrated audio solutions provider, increasing content per device and strengthening customer relationships. Its MEMS microphones and balanced armature speakers are well-suited for next-generation devices, while acquisitions like Audience have expanded its digital signal processing capabilities. Knowles also sees growth from edge computing and a diversified Precision Devices business serving aerospace, defense, medical, and industrial markets. The stock has gained 127.9% over the past year, underperforming peers Ciena and Viavi Solutions, but its technology leadership and operational efficiency are expected to support long-term growth.