In a research update to clients today, Tse maintained his “Top Pick” rating and one-year target price of $55.00 on KXS.
The analyst met with management recently and says the timing is right for new CEO John Sicard, a 22-year veteran of Kinaxis who succeeded Doug Colbeth on January 1.
“We had the opportunity to meet investors with Kinaxis CEO, John Sicard, and CFO, Richard Monkman. These meetings were meaningful in that they provided us a chance to gain perspective from the company’s newly minted CEO,” says Tse. “What we heard was that Sicard is inheriting the reigns at an ideal time as Kinaxis continues to execute on its outsized pace of growth while readying itself for a potential uptick in growth from its Accenture partnership which is already bearing fruit. Equally important, we see Sicard as providing important continuity to executing Kinaxis’ strategy.”
Tse says he came away from his recent meeting with added confidence in Kinaxis. The analyst says the company has “all the qualities” of a market leader without being valued like one. He thinks the company has barely scratched the surface of the opportunity in front of it, with what he estimates to be a less than 5 per cent market share.