Securities Litigation Partner James (Josh) Wilson Encourages Investors Who Suffered Losses Exceeding $100,000 In Kornit To Contact Him Directly To Discuss Their Options

NEW YORK, March 11, 2023 /PRNewswire/ — Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against Kornit Digital Ltd. (“Kornit ” or the “Company”) (NASDAQ: KRNT) and reminds investors of the April 17, 2023 Date to seek the lead plaintiff in a federal securities case that has been brought against the Company

You suffered losses exceeding $100,000 Investing in Kornit stock options or stock between February 17, 2021 And July 5, 2022 and would like to discuss your legal rights, call Faruqi & Faruqi partner Josh Wilson You can contact directly At 877-247-4292 Oder 212-983-9330 (Ext. 1310). Click here to get more information.

There are no fees or obligations.

Faruqi & Faruqi is a leading minority And Woman-owned national securities law firm with offices in New York, Pennsylvania, California and Georgia.

Kornit is a manufacturer of industrial digital printing solutions that are used in the apparel, textile and garment industries. The Company’s unique eco-friendly technology allows them to print directly onto both finished garments, as well on large rolls unfinished fabric.

The Company makes revenue through the sales of its printing equipment, textile inks, and other consumable products that can be used in its digital printers. Kornit offers customer support and equipment services to its end-users. This includes technical support, maintenance, repair, and technical support. Kornit began offering software services during the Class Period. These include a suite called KornitX that provides end-to–end fulfillment and production solutions., Inc., is Kornit’s largest customer. The Company had other major customers during the Class period, including Delta Apparel, Inc. (aka Delta Apparel) and Fanatics, Inc. (aka Fanatics), which are both apparel and activewear brands. Kornit makes more than 60% of its revenues through its ten largest customers. Kornit generates a large portion of its revenues from its largest customers. It was therefore crucial for the Company to maintain these customers and expand its customer base to reach its ambitious goal of generating 80% of its revenue. $1 Billion In revenue by 2026

The complaint claims that Defendants made a number of materially false and misleading statements about Kornit’s operations and business during the Class Period. Particularly, Defendants repeatedly praised Kornit’s technological advantages and promised investors that they faced little competition in “direct-to–garment” printing. Investors were also assured by Defendants that Kornit’s digital printing system and consumable products (such as textile inks) are in high demand. They also provided services to customers to help them maintain and manage their digital printers and manage customer workflows. Investors were also assured by Defendants that Kornit’s strong demand for its products and services would allow it to retain its existing customers and attract new ones. This would reduce the risk associated with a large portion of its revenues being concentrated in a few large customers.

In truth, defendants knew, or at the very least, disregard, that Company’s digital printing business was plagued in quality control and customer service issues. These issues and deficiencies led Kornit’s loss of market share to rivals, which in turn resulted in lower revenue for the Company. Customers went elsewhere to get their digital printing needs. Due to Defendants’ misleading statements, Kornit ordinary stock shares were trading at artificially high prices during the Class Period.

The truth was finally revealed to investors 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 Kornit’s products and services. Kornit was likely to lose revenue from these two customers.

On May 11, 2022Kornit reported a net loss in spite of reporting revenue that exceeded expectations. $5.2 Million Comparable to a profit in the first quarter 2022, $5.1 Million In the preceding year period. Revenue guidance was also issued by the Company for the second quarter 2022, which was significantly lower than analysts’ expectations. Kornit said that the Company’s disappointing guidance was due to slowdown in orders from customers on the ecommerce market. Kornit also acknowledged that the Company knew for at most the past two quarters that Delta Apparel purchased digital printing equipment from a Kornit competitor. These disclosures caused Kornit shares’ price to fall by $18.78 Each share is 33%

Then, on July 5, 2022Kornit stated that it expected to report a significant revenue gap for the second quarter 2022. Kornit expects revenue to reach between $200,000 and $35,000 for the second quarter. $56.4 Million To $59.4 millionsThis is well below the revenue guidance of between $85 Million And $95 Million The Company provided less revenue than it had two months ago. Kornit stated that the significant revenue decline was due to “a substantially slower pace of direct to-garment (DTG), systems orders in quarter two than our expectations.” These disclosures caused Kornit shares’ price to fall by another $8.10 Each share is 25.7%

The court-appointed plaintiff lead is the investor who has the largest financial interest. This is an individual who is adequate and typical for class members and who oversees the litigation in favor of the putative classes. Any member of the putative group may request the Court to appoint a lead plaintiff through any counsel they choose, or can opt to remain an absent member of the class and do nothing. Your right to share in any recovery does not change by whether you are chosen to serve as the lead plaintiff. 

Faruqi & Faruqi, LLP also encourages anyone with information regarding Kornit’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.

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