Kinaxis is still undervalued, ATB Capital says

Kinaxis (Kinaxis Stock Quote, Chart, News, Analysts, Financials TSXV:KXS) delivered first-quarter results that met expectations, with record adjusted EBITDA and continued momentum in annual recurring revenue, prompting ATB Capital Markets to maintain its “Outperform” rating and $210.00 price target.

In a May 7 note, ATB analyst Martin Toner said Kinaxis reported Q1 2025 results in line with expectations, with revenue of $132.8-million, up 11.2% from last year. Gross profit of $86.5 million and a 65.2% margin came in above estimates, with margins improving from the previous quarter. Adjusted EBITDA hit a record $33.1-million, or 25% of revenue, also beating forecasts. Annual recurring revenue (ARR) rose 14%, improving by over two percentage points from the previous quarter. Kinaxis kept its full-year 2025 guidance unchanged, including adjusted EBITDA margins of 23% to 25% and revenue of $535-million to $550-million, implying annual growth of 11% to 14%. The company also reaffirmed its SaaS revenue growth target of 11% to 13%, or 12% to 14% on a constant currency basis.

Toner said incremental ARR was $12.0mm this quarter, up from $5.0mm in Q1/24, which he thinks reflects positively on customer demand.

Kinaxis reported revenue of $132.8 million for the first quarter of fiscal 2025, up 11.2% year-over-year and in line with consensus estimates of $132.6 million. Adjusted EBITDA came in at a record $33.1 million, representing a 25% margin and exceeding the consensus forecast of $31.0 million.

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“We are constructive on the fact that KXS has maintained its FY25 guide in the face of macro uncertainty, while the business continues to expand margins at low double-digit revenue growth rates,” Toner said. “KXS is nearing its 25% mid-term adj. EBITDA margin target, and could see currency tailwinds (given a weakening USD) in the coming quarters.”

He said ATB will look for updates on the outlook for ARR growth, the backlog and the state of the enterprise spend environment in the face of recent tariff uncertainty during the company’s May 8 investors’ call.

In a May 7 release on the Q1 results, Kinaxis interim CEO Bob Courteau said new business was solid in Q1, as expansions from existing customers hit record levels for a first quarter.

“While tariffs have created massive uncertainty across markets globally, our fiscal 2025 guidance remains firmly in sight,” Courteau said. “In April, our flagship industry event, Kinexions, drew a record-breaking 1,000 supply chain community experts who gathered to learn from leaders like ExxonMobil, General Motors, Pfizer and Colgate-Palmolive. Attendees were hands-on with Maestro’s latest generative AI and agentic AI capabilities, which further extend our lead over competitors and will be available for subscription to initial customers in the second half of 2025.

“We’re also thrilled with the feedback on our new Tariff Response offering, which offers prospective customers a powerful preview of Maestro’s powers to tackle one of the most complex challenges supply chain practitioners have ever faced.”

Kinaxis is an Ottawa-based supply chain software company that provides AI-powered tools to help businesses manage and coordinate complex global supply chains.

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