National Bank raises price target on Tecsys to $41.00

National Bank Financial analyst Doug Taylor says Tecsys’s (Tecsys Stock Quote, Chart, News, Analysts, Financials TSX:TCS) stronger fiscal Q1 results point to a quick rebound in expectations for the supply chain software company.

As reported by the Globe and Mail, Taylor maintained his “Outperform” rating on Tecsys and raised his target to $41.00 from $40.00. The average target is $38.92.

Tecsys reported Q1 revenue of $50.0-million, up 8.9% year-over-year and ahead of Taylor’s $47.6-million estimate and consensus at $47.8-million.

Adjusted EBITDA rose 13.7% to $6.9-million, also ahead of Taylor’s $5.2-million forecast and consensus at $5.0-million.

Taylor said the quarter supports his thesis, with stronger Elite SaaS growth, better bookings and improved guidance offsetting a slight reduction in his target multiple.

“Core Elite SaaS growth is becoming more visible and better supported,” Taylor said in his Sept. 14 report.

Elite SaaS ARR grew 22% year-over-year on a constant-currency basis. Record fiscal Q1 Elite bookings and stronger installed-base expansion helped total SaaS ARR increase $7.0-million sequentially despite continued non-Elite attrition.

Taylor said $63.8-million of SaaS remaining performance obligations scheduled for the balance of fiscal 2027 covers nearly 90% of Tecsys’s raised SaaS growth guidance.

Tecsys increased its fiscal 2027 revenue growth outlook to 5% to 8% from 2% to 4%. It also raised its Adjusted EBITDA margin guidance to 11% to 14% from 11% to 13%.

“Margin inflection has more runway,” Taylor said.

The analyst said SaaS gross-margin expansion and disciplined operating spending supported the higher margin outlook. Tecsys is targeting SaaS margins of 70% exiting fiscal 2027 and 75% exiting fiscal 2028, compared with 66% in fiscal 2026.

Taylor said rising Elite mix and legacy migrations should provide margin tailwinds beyond fiscal 2027.

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