Kinaxis (TSX:KXS) - Share price, News & Analysis

Q: What is the Fair Price of KXS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

KXS (CA$144.94) is trading below our estimate of [[fair value]] (CA$188.8)

KXS fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	4/6
Past Performance	3/6
Financial Health	6/6
Dividends	0/6

KXS Stock Overview

Rewards

Trading at 23.2% below our estimate of its fair value

Earnings are forecast to grow 43.27% per year

Earnings grew by 94.9% over the past year

Risk Analysis

Large one-off items impacting financial results

Kinaxis Competitors

Descartes Systems Group

TSX:DSG

CA$7.2b

Topicus.com

TSXV:TOI

CA$5.5b

Enghouse Systems

TSX:ENGH

CA$1.6b

Lightspeed Commerce

TSX:LSPD

CA$4.9b

Price History & Performance

Summary of all time highs, changes and price drops for Kinaxis
Historical stock prices
Current Share Price	CA$144.94
52 Week High	CA$229.98
52 Week Low	CA$119.48
Beta	0.82
1 Month Change	5.79%
3 Month Change	-12.55%
1 Year Change	-6.79%
3 Year Change	77.47%
5 Year Change	79.51%
Change since IPO	1,013.21%

Recent News & Updates

Jun 06

Is Kinaxis Inc. (TSE:KXS) Trading At A 24% Discount?

Today we will run through one way of estimating the intrinsic value of Kinaxis Inc. ( TSE:KXS ) by taking the forecast...

May 22

At CA$146, Is Kinaxis Inc. (TSE:KXS) Worth Looking At Closely?

While Kinaxis Inc. ( TSE:KXS ) might not be the most widely known stock at the moment, it saw a decent share price...

May 07

Here's What's Concerning About Kinaxis' (TSE:KXS) Returns On Capital

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

	KXS	CA Software	CA Market
7D	15.4%	7.5%	0.3%
1Y	-6.8%	-24.6%	-4.0%

Return vs Industry: KXS exceeded the Canadian Software industry which returned -24.6% over the past year.

Return vs Market: KXS underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is KXS's price volatile compared to industry and market?
KXS volatility
KXS Average Weekly Movement	7.3%
Software Industry Average Movement	12.8%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: KXS is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: KXS's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1984	n/a	John Sicard	https://www.kinaxis.com

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.

Kinaxis Fundamentals Summary

How do Kinaxis's earnings and revenue compare to its market cap?
KXS fundamental statistics
Market Cap	US$3.10b
Earnings (TTM)	US$12.89m
Revenue (TTM)	US$291.11m

240.2x

P/E Ratio

10.6x

P/S Ratio

Is KXS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
KXS income statement (TTM)
Revenue	US$291.11m
Cost of Revenue	US$94.72m
Gross Profit	US$196.39m
Other Expenses	US$183.50m
Earnings	US$12.89m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.47
Gross Margin	67.46%
Net Profit Margin	4.43%
Debt/Equity Ratio	0%

How did KXS perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is KXS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for KXS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for KXS. This is calculated by dividing KXS's market cap by their current preferred multiple.
What is KXS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$3.10b

KXS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	10x
Enterprise Value/EBITDA	84.8x
PEG Ratio	5.6x

Price to Sales Ratio vs Peers

How does KXS's PS Ratio compare to its peers?

KXS PS Ratio vs Peers

The above table shows the PS ratio for KXS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	7.1x
DSG Descartes Systems Group	12.6x	10.7%	CA$7.2b
TOI Topicus.com	5.3x	n/a	CA$5.5b
ENGH Enghouse Systems	3.6x	3.6%	CA$1.6b
LSPD Lightspeed Commerce	6.9x	21.1%	CA$4.9b
KXS Kinaxis	10.6x	16.0%	CA$4.0b

Forward PS

Price-To-Sales vs Peers: KXS is expensive based on its Price-To-Sales Ratio (10.6x) compared to the peer average (7.1x).

Price to Earnings Ratio vs Industry

How does KXS's PE Ratio compare vs other companies in the CA Software Industry?

Price-To-Sales vs Industry: KXS is expensive based on its Price-To-Sales Ratio (10.6x) compared to the Canadian Software industry average (3.9x)

Price to Sales Ratio vs Fair Ratio

What is KXS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

KXS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	10.6x
Fair PS Ratio	5.4x

Price-To-Sales vs Fair Ratio: KXS is expensive based on its Price-To-Sales Ratio (10.6x) compared to the estimated Fair Price-To-Sales Ratio (5.4x).

Share Price vs Fair Value

What is the Fair Price of KXS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: KXS (CA$144.94) is trading below our estimate of fair value (CA$188.8)

Significantly Below Fair Value: KXS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: KXS is poor value based on its PEG Ratio (5.6x)

Discover undervalued companies

Future Growth

How is Kinaxis forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

43.3%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: KXS's forecast earnings growth (43.3% per year) is above the savings rate (1.6%).

Earnings vs Market: KXS's earnings (43.3% per year) are forecast to grow faster than the Canadian market (8.2% per year).

High Growth Earnings: KXS's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: KXS's revenue (16% per year) is forecast to grow faster than the Canadian market (7% per year).

High Growth Revenue: KXS's revenue (16% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if KXS's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has Kinaxis performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-14.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: KXS has a large one-off gain of $6.0M impacting its March 31 2022 financial results.

Growing Profit Margin: KXS's current net profit margins (4.4%) are higher than last year (2.9%).

Past Earnings Growth Analysis

Earnings Trend: KXS's earnings have declined by 14.4% per year over the past 5 years.

Accelerating Growth: KXS's earnings growth over the past year (94.9%) exceeds its 5-year average (-14.4% per year).

Earnings vs Industry: KXS earnings growth over the past year (94.9%) exceeded the Software industry 7.6%.

Return on Equity

High ROE: KXS's Return on Equity (3.7%) is considered low.

Discover strong past performing companies

Financial Health

How is Kinaxis's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: KXS's short term assets ($370.5M) exceed its short term liabilities ($164.6M).

Long Term Liabilities: KXS's short term assets ($370.5M) exceed its long term liabilities ($59.8M).

Debt to Equity History and Analysis

Debt Level: KXS is debt free.

Reducing Debt: KXS has not had any debt for past 5 years.

Debt Coverage: KXS has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: KXS has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Discover healthy companies

Dividend

What is Kinaxis's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate KXS's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate KXS's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if KXS's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if KXS's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as KXS has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

4.3yrs

Average management tenure

CEO

John Sicard (58 yo)

6.42yrs

Tenure

US$5,233,700

Compensation

Mr. John Ernest Sicard has been the Chief Executive Officer and President of Kinaxis Inc. since January 1, 2016. Mr. Sicard joined Kinaxis in 1994 where he has held a number of senior management roles incl...

CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD5.23M) is above average for companies of similar size in the Canadian market ($USD3.62M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: KXS's management team is considered experienced (4.3 years average tenure).

Board Members

Experienced Board: KXS's board of directors are considered experienced (5.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/26 00:00
End of Day Share Price	2022/06/24 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31