Earnings Update: Kinaxis Inc. (TSE:KXS) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Kinaxis Inc. (TSE:KXS) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were overall in line with expectations, with the company breaking even at the statutory earnings per share (EPS) level on US$483m in revenue. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Kinaxis

Taking into account the latest results, the consensus forecast from Kinaxis' ten analysts is for revenues of US$543.2m in 2025. This reflects a decent 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 90,216% to US$1.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$560.3m and earnings per share (EPS) of US$1.69 in 2025. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

The consensus has made no major changes to the price target of CA$197, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Kinaxis analyst has a price target of CA$226 per share, while the most pessimistic values it at CA$162. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Kinaxis' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it seems obvious that Kinaxis is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kinaxis following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at CA$197, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Kinaxis. Long-term earnings power is much more important than next year's profits. We have forecasts for Kinaxis going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Kinaxis that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.