Is It Time To Consider Buying Kinaxis Inc. (TSE:KXS)?

Kinaxis Inc. (TSE:KXS), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the TSX. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Today I will analyse the most recent data on Kinaxis’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Kinaxis

What Is Kinaxis Worth?

According to my valuation model, Kinaxis seems to be fairly priced at around 10% below my intrinsic value, which means if you buy Kinaxis today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CA$180.86, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Kinaxis’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Kinaxis generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Kinaxis' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? KXS’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on KXS, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you'd like to know more about Kinaxis as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 1 warning sign for Kinaxis and you'll want to know about it.

If you are no longer interested in Kinaxis, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.