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It’s time to buy Kinaxis, Laurentian Bank Securities says

Kinaxis CEO John Sicard

A quarter that bested his expectations has Laurentian Bank Securities analyst Nick Agostino upping his rating on Kinaxis (Kinaxis Stock Quote, Chart, News: TSX:KXS).

On Wednesday, Kinaxis reported its Q3, 2017 results. The company earned $6.03-million on revenue of $33.5-million, a topline that was 12 per cent better than the same period last year.

“Our strong third quarter results demonstrate that sustained subscription revenue growth and consistent profitability remain the fundamental tenets of our robust business model,” said CEO John Sicard. “Our business momentum continues to be fuelled by a world-class product delivered by a growing strategic partner ecosystem. Our partners expand access to new prospective customer relationships and deliver value through an accredited network of knowledgeable professionals. This is a powerful combination that enables us to profitably scale Kinaxis. Our leadership team remains focused on delivering on our promise to revolutionize supply chain planning and enable customers to pro-actively plan and respond in today’s complex and unpredictable business environment. With the recent addition of Paul Carreiro as chief revenue officer, we are well positioned for continued growth.”

Agostino notes that Kinaxis revenue number was two per cent above his estimate and the company’s EBITDA of (U.S.) $10.8-million beat the $9.0-million he had modeled.

The analyst, noting upwardly revised guidance from the company, today changed his rating on the stock from “Hold” to “Buy” and raised his one-year price target from $83.00 to $88.00.

“We adjust our estimates to reflect the results and new guidance,” the analyst explained. “KXS trades at 8.4x our NTM sales vs. high-growth tech companies at 5.6x; KXS historically trades at an average 2.1x multiple premium to this group, reflecting its “disruptor” status.”

Agostino thinks Kinaxis will generate EBITDA of $38.4-million on revenue of $133.8-million in fiscal 2017. He expects those numbers will improve to EBITDA of $51.6-million on a topline of $160.7-million the following year.

Tagged with: kxs
Nick Waddell

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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