Kinaxis Inc (KXS) AI Stock Analysis

• Market Cap: C$4.45B
• Dividend Yield: N/A
• Average Volume (3M): 119.52K
• Price to Earnings (P/E): 157.8
• Beta (1Y): 0.78
• Revenue Growth: 14.85%
• EPS Growth: -105.25%
• Country: CA
• Employees: 1,674
• Sector: Technology
• Sector Strength: 40
• Industry: Software - Application
• EPS (TTM): -0.03
• Shares Outstanding: 28,097,271
• 10 Day Avg. Volume: 96,177
• 30 Day Avg. Volume: 119,522
• PEG Ratio: 3.94
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.44
• Price to Cash Flow (P/CF): 32.20
• P/FCF Ratio: 35.60
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$193.00
• Price Target Upside: 23.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

Kinaxis Inc. shows strong revenue and ARR growth with solid cash flow and financial stability, which are key strengths. However, profitability challenges and negative valuation metrics weigh on the overall score. The company's strategic advancements and positive earnings call sentiment suggest a favorable outlook, but technical indicators show bearish momentum, adding caution to the stock's performance.

Positive Factors

Earnings

Kinaxis achieved a solid EBITDA performance, exceeding consensus expectations with a 32% year-over-year increase.

Market Position

Kinaxis is well-positioned in its core markets, supported by strong customer and industry feedback and a robust customer list.

Valuation

The stock is viewed as significantly undervalued, with potential for longer-term growth and as a potential M&A target.

Negative Factors

Management Changes

There is near-term execution risk due to recent management changes, which may affect performance.

Revenue Expectations

Consensus FY2025 estimates are too high, with a 2% lower estimate on FY2025 SaaS revenue and total revenue, and a 6% lower estimate on EBITDA.

Kinaxis Inc Business Overview & Revenue Model

Company Description

Kinaxis Inc. provides cloud-based subscription software for supply chain operations in the United States, Japan, Hong Kong, The Netherlands, South Korea, the United Kingdom, Singapore, France, Ireland, Germany, India, and Canada. It offers Kinaxis, a cloud-based software-as-a-service platform, which provides advanced planning, sales and operations planning, supply and demand planning, inventory management, and command and control center services. The company also provides professional services, including business transformation, implementation, and continuous learning services; and support services. It serves technology and electronics, aerospace and defense, life sciences and pharmaceuticals, industrial, automotive, consumer products, and retail markets. The company was formerly known as webPLAN Inc. and changed its name to Kinaxis Inc. in May 2005. Kinaxis Inc. was founded in 1984 and is headquartered in Ottawa, Canada.

How the Company Makes Money

Kinaxis Inc. generates revenue primarily through its subscription-based model for its software platform, RapidResponse. The company earns money by charging its clients recurring fees for access to its cloud-based solutions, which are tailored to meet the specific needs of various industries such as automotive, consumer products, and healthcare. Additionally, Kinaxis offers professional services that include implementation, training, and consulting to help customers maximize the value of their software investment. Partnerships with technology providers and system integrators also play a crucial role in enhancing the company's market reach and helping drive sales of its comprehensive supply chain management solutions.

Kinaxis Inc Financial Statement Overview

Summary

Kinaxis Inc. demonstrates strong revenue growth and solid cash flow generation, supported by a robust balance sheet with low leverage. However, profitability margins are under pressure, which affects return on equity.

Income Statement

Kinaxis Inc. shows strong revenue growth with a notable increase from $426.97M to $483.11M, indicating a healthy expansion trajectory. Gross profit margin remains solid at 61%, with a slight decline in net profit margin to 0.01% from 2.36% last year, largely due to zero EBIT reported this year, affecting profitability. EBITDA margin, however, remains consistent at around 7.8%. Overall, the company demonstrates impressive revenue growth but faces challenges in maintaining higher profitability margins.

Balance Sheet

The balance sheet reflects a robust equity position with an equity ratio of 57.7%, indicating financial stability. The debt-to-equity ratio is low at 0.12, suggesting prudent leverage management. However, return on equity has decreased to 0.01% from 2.21%, reflecting lower net income. Kinaxis Inc. maintains a healthy cash reserve, contributing to its strong financial standing.

Cash Flow

Operating cash flow increased significantly to $99.21M, showcasing strong cash generation capabilities. Free cash flow also improved to $94.70M, indicating efficient capital management. The operating cash flow to net income ratio is exceptionally high due to the low net income reported, which may not fully reflect operational efficiency. Overall, cash flow metrics show positive trends, but the low net income slightly clouds the picture.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
483.11M	426.97M	366.89M	250.73M	224.19M
	Gross Profit
294.58M	258.90M	235.79M	163.97M	154.06M
	EBIT
0.00	14.10M	25.60M	2.48M	20.97M
	EBITDA
37.67M	40.39M	50.66M	22.89M	36.53M
	Net Income Common Stockholders
56.00K	10.06M	20.08M	-1.17M	13.73M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
298.50M	292.96M	225.82M	233.39M	213.14M
	Total Assets
685.34M	691.98M	648.27M	520.27M	428.41M
	Total Debt
48.94M	51.79M	56.97M	55.76M	16.62M
	Net Debt
-123.26M	-123.05M	-118.38M	-147.46M	-166.34M
	Total Liabilities
289.82M	237.15M	246.84M	199.05M	146.65M
	Stockholders Equity
395.51M	454.83M	401.43M	321.22M	281.76M
Cash Flow		Free Cash Flow
94.70M	77.06M	6.27M	16.30M	45.03M
	Operating Cash Flow
99.21M	79.36M	24.52M	50.14M	59.47M
	Investing Cash Flow
-13.62M	-67.31M	-74.99M	-34.63M	-76.26M
	Financing Cash Flow
-83.69M	-12.04M	26.84M	5.85M	16.64M

Kinaxis Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 155.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:KXS, the sentiment is Negative. The current price of 155.75 is below the 20-day moving average (MA) of 158.40, below the 50-day MA of 161.60, and below the 200-day MA of 163.03, indicating a bearish trend. The MACD of -1.31 indicates Negative momentum. The RSI at 45.25 is Neutral, neither overbought nor oversold. The STOCH value of 35.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:KXS.

Kinaxis Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KXS	68 Neutral	C$4.45B	157.81	-0.10%	―	14.85%	-105.25%
SYZ	68 Neutral	C$176.36M	―	-1.93%	0.53%	-13.99%	-421.95%
CMG	66 Neutral	C$621.57M	25.17	33.92%	2.65%	32.49%	-0.20%
Sector *	57 Neutral	$18.52B	9.81	-13.96%	2.71%	5.07%	-23.65%

Kinaxis Inc Corporate Events

Kinaxis Inc. Achieves Record Growth in Q4 2024

Kinaxis Inc. reported strong fourth-quarter results for 2024, achieving record-breaking incremental business and customer additions. The company saw a 17% growth in SaaS revenue and a 14% increase in annual recurring revenue in constant currency. Despite a loss per diluted share, the adjusted EBITDA margin improved to 25%. The company remains focused on growth in annual recurring revenue and aims to achieve consistent Rule of 40 performance in 2025.

Kinaxis Resolves Litigation with Blue Yonder

Kinaxis Inc., a leader in supply chain orchestration, has reached a settlement with Blue Yonder Group, Inc. to resolve all pending litigation, including patent infringement claims and trade secret misappropriation counterclaims. The confidential settlement is expected to have implications on Kinaxis’ operations and industry positioning, potentially enhancing their market reputation and stakeholder confidence.

Kinaxis and Blue Yonder Settle Litigation, Strengthening Industry Position

Kinaxis has reached a settlement agreement with Blue Yonder Group to resolve ongoing litigation, which included patent and trade secret disputes. The confidential resolution helps Kinaxis maintain its focus on supply chain innovation without the distraction of legal conflicts, potentially strengthening its industry position and stakeholder confidence.