In a research update to clients this morning, Tse reiterated his “BUY” rating and $22 one-year target price on KXS.
Tse spent part of last week attending Kinaxis’ annual user conference in San Diego. He says one of the most memorable parts of the event was the enthusiasm from the company’s clients, many of whom are Fortune 1000 companies who attended the show.
In his coverage initiation report on Kinaxis in August, Tse explained his view that that Kinaxis is “positioned at the heart of the enterprise application renaissance”. He says the company’s cloud solution, RapidResponse, is a differentiated platform in Supply Chain Management (SCM), a space the analyst thinks is one of the three foundation pillars to the enterprise applications market. While the market is not as big as the massive $25-billion plus enterprise resource planning (ERP) market, SCM offers plenty of room for growth, as current estimates peg it size at more than $8-billion, noted Tse.
“Bottom line,” says Tse, “we believe Kinaxis is one of the highest quality technology names to go public in recent years. We believe it has the potential to be comparable to other enterprise application names like Salesforce.com and Workday given the size of the SCM market…”
Kinaxis will report its Q3, 2014 results on November 6th. The company will follow up on a Q2 in which it lost (U.S.) $5.3-million on revenue of $17.9-million, a topline that was up 14% from the same period last year.