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Eight Capital launches coverage of Kinaxis with a $91.00 target

Canadian techs

Canadian techsIt has quietly been one of the great performers in the recent history of the Canadian tech space. But Eight Capital analyst Eyal Ofir thinks there is still double-digit upside left in Kinaxis (Kinaxis Stock Quote, Chart, News: TSX:KXS).

In a research report to clients Tuesday, Ofir initiated coverage of Kinaxis with a “Buy” rating and a one-year price target of $91.00, implying a return of 17 per cent at the time of publication.

Ofir yesterday laid out his case for buying Kinaxis, which IPO’d at $13.00 in 2014 and now trades above $80.00.

“Led by a strong management team, KXS continues to take market share counting impressive customers in an industry that is primed for a shift from legacy solutions to a SaaS model,” says the analyst. “We believe that investors should pay a premium multiple for this first class enterprise software name in order to gain exposure to a growth market and a leading technology vendor. Over the longer term, we believe that KXS could become a takeover candidate for a large legacy player, or a new entrant. Looking beyond its impressive 25-30% CAGR, KXS has a strong margin profile that could make it more attractive to a player with a broader market reach or is willing to invest more heavily for growth.”

Ofir thinks Kinaxis will generate EBITDA of $37.8-million on revenue of $143.3-million in fiscal 2017. He expects these numbers will improve to EBITDA of $54.4-million on a topline of $187.2-million the following year.

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About The Author /

Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.
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