Kinaxis Inc. (TSX:KXS) is an Ottawa-based software company that provides supply chain solutions to its global client base. Shares of Kinaxis were down 2.31% in early afternoon trading on February 27 and the stock has climbed 9.1% in 2018 thus far. Kinaxis has established itself as a premier tech growth stock since being listed on the TSX in June 2014. The stock has soared over 540% since its debut.
The big news for Kinaxis in 2018 was the announcement in January that Toyota Motor Corp. had chosen it to manage its automotive demand and supply chain processes. Toyota is the second-largest automobile manufacturer in the world. Kinaxis stock was battered in mid-2017 after the loss of a significant Asia-based client due to a contract breach, so this piece of news was welcome from investors.
Kinaxis is set to release its 2017 fourth quarter and full-year results on March 1. In its third quarter results Kinaxis saw revenue and gross profit increase 12% and 16%, respectively. For its full-year guidance, Kinaxis projected revenue between $132 million and $134 million and expected annual subscription revenue to grow between 22% and 23%. It will be worth monitoring how this guidance shakes out when we get a look at its Q4 and full-year earnings.
Is Kinaxis worth a buy ahead of its next round of earnings? The stock is still trading at $83.87 as of this writing compared to the all-time high of $91.98 it reached in early June ahead of its Q2 2017 results, which came with the loss of a major client. Barring a comparable disappointment, Kinaxis remains an attractive long-term add for any portfolio seeking growth.
