Analysts say beat the market with these three Canadian tech stocks

The first half of 2023 has definitely been kinder to tech stocks, and investors have likely recouped some of the losses suffered over the previous year-and-a-half. And while what’s up next is an unknown with plenty of folks predicting more volatility to come, there are still some technology stocks with very good ratings from analysts. Here, Cantech Letter has three Canadian names, all with recent Buy ratings.

One of the more well-known tech stocks on the Canadian landscape is Kinaxis (Kinaxis Stock Quote, Charts, News, Analysts, Financials TSX:KXS), the supply chain management software company. 

Still off a bit from all-time highs, KXS has put on about 20 per cent so far this year, but Laurentian Bank Securities analyst Nick Agostino sees the stock rising further over the next 12 months. Agostino reviewed Kinaxis’ latest quarterly results in a May 4 report, saying the Q1 arrived in-line with forecasts and management raised its guidance, although bookings activity looked to be slower in a cautionary macroeconomic environment.

At the same time, Agostino thinks any lull in Kinaxis’ business will likely be short-lived. The analyst maintained a “Buy” rating on the stock and $225 target, projected a one-year return at the time of his report’s publication of 27 per cent.

“While Q1 results were largely in-line and select guidance was increased, bookings activity was slower due to economic-driven caution. As with similar past cautionary events (pandemic), we would be buyers on any attributable weakness,” Agostino wrote.

“We heard similar caution at the onset of the pandemic, but within one to two quarters saw reinvigorated demand and bookings activity normalize,” he said.

Next up is Eupraxia Pharmaceuticals (Eupraxia Pharmaceuticals Stock Quote, Charts, News, Analysts, Financials TSX:EPRX), a biotech company with lead candidate P-104IAR in clinical trials for both osteoarthritis (OA) and eosinophilic esophagitis (EoE).

The stock has been a huge gainer over the past 12 months, but Raymond James analyst Rahul Sarugaser says investors ought to be on the lookout mid-June for Phase 2 trial data on OA from Eupraxia and he pointed to the recent hire of a new Chief Medical Officer as a confidence sign on EPRX’s part in preparation for a Phase 3 trial.

“We read this as a positive leading indicator of strong top-line data from its Ph2 clinical trial in OA, which should read out in a matter of weeks, so we raise our rating on EPRX to Strong Buy, and reiterate our $11 target price,” Sarugaser wrote in a June 8 report.

At the time of publication, Sarugaser’s $11 target represented a one-year return of 56 per cent.

Last we have virtual health and wellness company Dialogue Health Technologies (Dialogue Health Technologies Stock Quote, Charts, News, Analysts, Financials TSX:CARE), which received a reiterated “Buy” rating last month from Desjardins Capital Markets analyst Jerome Dubrueil.

Dubreuil reviewed first quarter results from Dialogue in a May 11 report, focusing on the company’s gross margin, which rose to 57.4 per cent compared to 41.0 per cent a year earlier. 

The analyst expects CARE to get to breakeven EBITDA by the end of the year. In his update, Dubreuil kept a “Buy” rating while raising his target from $5.00 to $5.25 per share, representing at the time of publication a projected return of 37 per cent.

“CARE reported results which were slightly better than expected. The company continues to deliver strong improvement in gross margin and is slightly ahead of its plan to achieve breakeven adjusted EBITDA later this year. Interestingly, management presented its adjusted EBITDA margin forecast for five years and beyond, which supports our view that the stock is undervalued,” Dubreuil said.