Is Kinaxis Stock a Buy at 52-Week Highs?

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Kinaxis (TSX:KXS) stock recently hit 52-week highs on the TSX, and it couldn’t be at a stranger time. The TSX continues to trade downwards, with more and more reason for companies to continue falling. Especially those in the tech industry.

Yet, here is Kinaxis stock up 5% in the last year, and 31% in the last six months alone. So what’s going on with Kinaxis stock, and is it a buy on the TSX today?

Climbing higher and higher

Kinaxis stock started climbing substantially within the last week or so, and that might have to do with some analysts upgrading the cloud-based supply-chain management company. In fact, several analysts did so after what were better-than-expected earnings results from the company.

Reported revenue came in at US$98.5 million, which was a major 44% increase from the year before, in-line with estimates. Adjusted earnings before interest, taxes, depreciation and amortization also beat projections at US$21.1 million.

These earnings led to several analysts increasing their price targets for the stock, most within the $200 to $230 range. As of writing, Kinaxis stock trades at 52-week highs, true, but still at $183 per share.

Yet, it doesn’t seem that mere current earnings are the reason for the upgrade. Undoubtedly, the future outlook also weighed in.

2023 guidance ahead of expectations

What also beat expectations was the guidance for 2023 for Kinaxis stock. As annual recurring revenue grew for the year, it’s clear management is able to follow through on strengthening supply chain resilience. And not just for small businesses, but enterprise level companies as well.

Analysts therefore believe Kinaxis stock will outperform in 2023, even with supply-chain disruptions weighing on the stock over the last two years. The company dusted itself off, and proved it can continue on its growth path in the medium and long term as well.

So as Kinaxis stock continues to expect 2023 software-as-a-service (SaaS) revenue growth between 25% and 27%, analysts were pretty unanimous that the company is a buy.

But, is it too late?

Granted, shares of Kinaxis stock have surged in the last few weeks with earnings and analysts pushing the price higher. However, if these analysts are to be believed, there is far more room to grow. As of writing, shares are at $183 per share. To reach the low-end of expectations at $200 per share, that’s a potential upside of 6% right now.

But when it comes to investing, investors shouldn’t look at short-term gains on the TSX today. They need to think long term. Kinaxis stock has therefore proven that even amidst supply-chain disruptions and a market downturn, it can not only survive but thrive.

Therefore, I do not think it’s too late to pick up Kinaxis stock. In fact, with shares up just 5% in the last year, you could see even more of a surge when earnings come out in May. Therefore, it’s a strong choice both in the short and long term.

Yet, if we look back at performance, Kinaxis stock has grown 1,273% since coming on the market in 2014. That’s a compound annual growth rate (CAGR) of 34.2%! And as supply-chain demands only become stronger, the next decade could look quite similar for today’s investor.

The post Is Kinaxis Stock a Buy at 52-Week Highs? appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has positions in Kinaxis. The Motley Fool recommends Kinaxis. The Motley Fool has a disclosure policy.