Kornit Digital (KRNT) posted mixed Q1 result "as uneven macro caused some purchase delays," while earnings and revenue metrics look bullish for the full year, Morgan Stanley said Wednesday in a report.

Revenue in Q1 rose, and Q2 guidance "implies another quarter of more moderate growth" before an acceleration in H2, the report said.

Margins on adjusted earnings before interest, taxes, depreciation and amortization are expanding and annual recurring revenue may reach 20% of revenue by the end of the year, Morgan Stanley said.

Kornit, a manufacturer of industrial printers and inks for fabric and clothing designs, reported that trailing 12-month print impressions rose 10% in Q1 to a record 222 million, suggesting increasing product demand, Morgan Stanley said.

Morgan Stanley raised its price target on Kornit stock to $30 from $22 and maintained its overweight rating.

Kornit shares fell 2.5% in recent Thursday trading.

Price: 21.55, Change: -0.56, Percent Change: -2.51