This Software-Cum-Logistic Stock Flourishes Amid COVID-19

The technology industry, one of the booming sectors amid the coronavirus outbreak, has rallied to record highs, leading to several software companies accumulating unprecedented wealth. The rally may continue as investors expect more growth from these tech firms. One software-cum-supply-chain stock has proved these investors right. This stock’s price has soared by nearly 79 per cent year-to-date (YTD).

As pandemic brought the world to a grinding halt, this software firm has provided RapidResponse planning and supply chain solutions across North America, Europe, and Asia-Pacific regions. Led by its agility, resilience and innovative approach to supply chain management, this tech company has emerged as a hot stock this year.

The logistics and supply chain industry suffered several hiccups amid the pandemic. But the industry rebounded quickly by adapting to the new normal. Completing deliveries and supply chain requirements with the help of transformed technologies and artificial intelligence software.

Today, we are going to exclusively analyze Kinaxis® Inc (TSX:KXS). We will take an account of this tech stock’s market fundamentals and its financial health.

Kinaxis^® Inc (TSX:KXS)

Current Stock Price: C$ 181.20

Kinaxis^® Inc offers planning and response management solutions. The firm provides cloud service to manufacturers and product owners that can execute multiple supply chain management, retails and operations planning, and other associated functions from a single platform. Its flagship product RapidResponse^® is a cloud-based synchronized planning software. Recently, Kinaxis® increased its control tower skills on the platform with new instruction and control center application.

The company’s sales and operations planning solutions comprise inventory and capacity planning, demand and supply alignment, and inventory management. The firm serves throughout North America, Europe, and Asia Pacific territories.

Kinaxis® Stock Performance

Year-to-date stock performance of Kinaxis/ Source: EODHD/Others, Thomson Reuters

The current market capitalization of the software company is C$ 4.88 billion. The stock has advanced over 96 per cent since the coronavirus pandemic that caused a market meltdown in mid-March. In the last six months, the stock recorded a 4.36 per cent uptick in performance.

Its current earnings per share (EPS) is C$1.17, and the price-to-earnings (P/E) ratio is 144.80. The price-to-cash flow (P/CF) ratio is 56.10, and its current debt to equity (D/E) ratio stands at 0.06, as per data on the TMX.

The stock delivers a positive return-on-equity (ROE) at 9.47 per cent and a positive return-on-assets (ROA) at 6.73 per cent.

Global Platform For AI-Driven Supply Chain Management And Decision-Making Solutions

With its business transformation approach, Kinaxis^® offers tools to streamline and curtail the decision-making period, facilitate partnership, precisely envisage demand, and deliver solutions on the financial impact of trades. Enterprises like Coty, one of the world's largest beauty firms, uses the Kinaxis RapidResponse® platform for its unique concurrent planning technique to managing sales and operations and demand. The platform is powered Rubikloud, an AI-based platform that has been acquired by Kinaxis®.

The pandemic crisis has generated new levels of awareness among software organizations. As a result, Kinaxis® saw constant growth and an unmatched level of attendance by new clients at its Kinexions '20 event, stated John Sicard, President and CEO of Kinaxis during the Q3 results commentary.

Emerging Global Partnerships

The company recently announced that it entered a collaboration with CUBE SYSTEM INC, joining its emerging partner ecosystem in the Asia Pacific region. CUBE SYSTEM is an autonomous system integrator that offers diversified services comprising system design, maintenance and function services, and business procedure augmentation.

The company reported that Hollister chose Kinaxis® as part of its higher technology innovation approach to lead its prime supply chain management across the enterprise.

The supply-chain software player also announced that it renewed a contract with CASIO COMPUTER to improve and supervise the company's articles comprising of timepieces, e-dictionaries, and calculators. 

Kinaxis® Financial Highlights

The tech company reported a robust third quarter ended September 30, 2020, with a 26 per cent increase in Software as a service (SaaS) revenue to US$ 39.3 million from US$ 31.22 million in Q3 2019. The SaaS company registered total revenue of US$ 55.1 million in Q3 2020, a 17 per cent surge as compared to US$ 47.13 million in Q3 2019.

The company posted a gross profit of US$ 36.55 million in Q3 2020, an increase of 10 per cent as compared to US$ 33.32 million in Q3 2019.

Kinaxis® claims to focus on new client acquisitions and service expansion while retaining its current customers. It is expecting a growth of annual revenue from SaaS products and subscriptions. It elevated Mike Mauger to the position of Chief Customer Success Officer. In this role, Mauger manages the global customer support, client achievement experience, knowledge management, and cloud-based services teams to work in collaboration with clients to predict, identify, and settle demands efficiently.

Bottomline

Kinaxis’ AI-driven supply chain planning and decision-making makes it a futuristic tech company. This software company has rationalized its operations as per to the new normal amid the coronavirus pandemic crisis. The company has bagged more contracts due to its dynamic and innovative supply chain management solutions. This rallying stock has been rallying amid the pandemic, even as other sectors struggle to survive.