The stock has burned through his price target, but Industrial Alliance Securities analyst Blair Abernethy says Kinaxis’s (TSX:KXS) first quarter results may send him back to the drawing board.
On Monday, May 3, Kinaxis will report its Q1, 2017 results. Abernethy thinks the company will post EBITDA of $8.4-million and EPS of $0.22 on revenue of $32.0-million. The street consensus calls for EBITDA of $8.2-million and EPS of $0.18 on a topline of $32.5-million.
Abernethy says despite the more than strong run in shares of Kinaxis since its IPO there are still many things that could deliver upside.
“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,” says the analyst.
In a research update to clients today, Abernethy maintained his “Buy” rating and one-year price target of $73.00 on Kinaxis, implying a return of -6.0 per cent at the time of publication. The analyst addressed the fact that the stock has surpassed his target, suggesting that Q1 results may bring an update.
“We believe that Kinaxis is still in the relatively early stages of a long-term secular manufacturing industry technology growth opportunity,” he says. “We are maintaining our Buy rating and note that the stock is trading above the midpoint of our valuation range as we await the Q1/17 results before updating our forecasts and valuation.”
Abernethy thinks Kinaxis will post EBITDA of $37.2-million on revenue of $143.4-million in fiscal 2017. He expects these numbers will improve to EBITDA of $47.1-million on a topline of $174.8-million the following year.