Analyst raises his price target on Kinaxis to $225.00

Stifel analyst Suthan Sukumar raised his target on Kinaxis (Kinaxis Stock Quote, Chart, News, Analysts, Financials:TSX:KXS) to $225.00 from $200.00, citing strong demand for supply chain software and expectations that the company will exceed third-quarter forecasts and raise its guidance.

On Oct. 29, Sukumar maintained his “Buy” rating on the Ottawa-based company ahead of its Q3 results, scheduled for Nov. 4 after markets close.

“Supply chain transformation remains one of the more durable investment themes in software, in our view,” Sukumar said, noting recent results from competitor Manhattan Associates, which showed increasing bookings from new customers, stronger sales to existing clients and growing revenue opportunities from artificial intelligence.

Sukumar believes those trends support continued growth at Kinaxis. “We see Kinaxis positioning for another beat-and-raise when they report FQ3 results next week (11/4 after-market), with all-time-high win rates and F26 SaaS guide already 96%covered by existing backlog,” he said.

Kinaxis reported second-quarter SaaS revenue of US$106.5-million in August, up 20% year-over-year, while annual recurring revenue increased 19% to US$465.6-million. The company also raised its fiscal 2026 guidance for total revenue and SaaS revenue growth.

At the time, CEO Razat Gaurav said customer demand remained strong as businesses sought technology to manage increasingly complex supply chains.

“Our performance builds on the strongest first half in Kinaxis’ history and gives us the confidence to raise our full-year guidance for total revenue and SaaS revenue growth,” Gaurav said. He said Kinaxis’s investment in Maestro, its AI-powered supply chain platform, could support revenue growth by giving customers more ways to automate decisions and manage complex operations.

Sukumar said Kinaxis’s growth and improving profitability support a higher valuation, although the shares already trade at a premium to many software companies.

“While shares are not inexpensive at 18 times calendar 2027 estimated EBITDA, sustained growth and margin trends support an outlook for fundamentals upside,” he said.

The analyst believes that performance could justify a valuation closer to SaaS companies meeting the Rule of 40 benchmark, which trade at approximately 22 times estimated EBITDA, and Manhattan Associates at 30 times.

Sukumar attributed his revised $225.00 target to modest increases in his financial forecasts and higher valuation multiples across the software sector.

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