Kinaxis has multiple potential catalysts, says Industrial Alliance

A quarter that he regards as a neutral event isn’t detracting from the potential Industrial Alliance Securities analyst Blair Aberbethy sees in Kinaxis (Kinaxis Stock Quote, Chart, News: TSX:KXS).

Yesterday, Kinaxis reported its Q4 and fiscal 2016 results. In the fourth quarter, the company posted Adjusted EBITDA of $6.4-million on revenue of $30.3-million, a topline that was up 25 per cent over the same period a year earlier.

“Two thousand sixteen was another year of strong revenue and new customer growth. We delivered solid bottom-line results as we continued to make strategic investments to scale our business,” said CEO John Sicard. “The world’s largest companies have increasingly recognized that concurrent planning represents the future of effective supply chain management. Through RapidResponse, we are delivering on this promise and enabling our customers to pro-actively react to change. Our partner relationships continue to progress well and have supported a number of key wins in 2016. Our partners work to improve operational and financial performance for their clients by utilizing RapidResponse’s capabilities. With a strong platform in place, we enter 2017 in a great position to leverage our technology, customer relationships and strategic partners to continue to produce solid results.”

Abernethy says the quarter was about what he expected, with EBITDA a bit lower than he had modeled and revenue hitting his target exactly. With a more long-term approach, he says he believes these are early days for the Ottawa-based supply chain solutions provider.

“We continue to believe that Kinaxis is still in the relatively early stages of a long-term secular manufacturing industry technology growth opportunity,” says the analyst. “We see several upcoming potential catalysts for Kinaxis’ stock, including large new customer contract wins, traction in new(er) verticals, such as automotive, improved partner contributions, and further expansion of the product offering.”

Abernethy today maintained his “Buy” rating on Kinaxis.