Yahoo Finance Kinaxis Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
A week ago, Kinaxis Inc. (TSE:KXS) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. Kinaxis beat earnings, with revenues hitting US$119m, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 15%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Kinaxis after the latest results.
See our latest analysis for Kinaxis
Following the latest results, Kinaxis' eleven analysts are now forecasting revenues of US$490.1m in 2024. This would be a decent 10% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 59% to US$0.85. Before this earnings report, the analysts had been forecasting revenues of US$490.6m and earnings per share (EPS) of US$0.68 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the great increase in earnings per share expectations following these results.
There's been no major changes to the consensus price target of CA$196, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Kinaxis analyst has a price target of CA$225 per share, while the most pessimistic values it at CA$153. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Kinaxis' revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% 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 biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kinaxis' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Kinaxis going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Kinaxis has 1 warning sign we think you should be aware of.
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.
