Kinaxis still has meaningful upside, says Cormark

Kinaxis (Kinaxis Stock Quote, Chart, News: TSX:KXS) has nearly doubled since its IPO, but the stock still has big upside, says Cormark analyst Richard Tse.

Yesterday, Kinaxis reported its fourth quarter and fiscal 2014 results. In Q4, the company posted Adjusted EBITDA of $3.8-million on revenue of $18.8-million, in line with Tse’s expectations.

“In 2014, we delivered on our goal to grow subscription revenues and EBITDA, while simultaneously delivering value to our customers through our supply chain management applications,” said CEO Doug Colbeth. “By leveraging the power of RapidResponse, our customers are improving their supply chain visibility and analysis and, in doing so, empowering their ability to make better supply chain decisions and pro-actively react to change.”

Tse says the company’s fourth quarter was further validation of his bullish take on the Kinaxis’s future.

“In our opinion, despite the big move in the stock price (+84% since its IPO), we believe there’s meaningful upside from here given our outlook,” said Tse. “Interestingly, we think that outlook could be conservative in the face of the Company’s investment into products, sales, and a growing partner channel. In our opinion, the Q4 results and conference call backed up that thinking”.

Tse says Kinaxis has the qualities of a market leader, but has yet to be rewarded with the price of one. He says the company sits at the very centre of the enterprise application renaissance, helping customers who are moving into the cloud manage their supply chains.

In a research update to clients today, Tse maintained his “Buy” rating on Kinaxis, but raised his one year target on the stock from $22.00 to $31.00.