Last month, Kinaxis (TSX:KXS) stock came to the limelight, surging 27% between April 7 and May 15, 2025. Driving the stock was the launch of a tariff response solution on Kinaxis’s Maestro platform. This solution will help companies run a simulation for tariffs, test strategies, and assess risks to help their supply chains adapt to trade disruption with confidence.
This got investors curious about the stock, which has been underperforming the market for the last five years after hitting an all-time high in the 2020-2021 tech bubble.
Is the 27% jump an impulsive rise, or is it the beginning of a long-term uptrend?
Let’s find out.
Kinaxis’s business model
The company provides supply chain management solutions for large enterprises. It works on the subscription-based software-as-a-service (SaaS) model, where a subscription is a three- to five-year contract. However, the annual contract value keeps fluctuating depending on the size of the customer, the number of applications deployed, the number of users, and the number of licensed manufacturing, distribution, and inventory sites. The companies pay an annual subscription fee in advance.
As of March 31, 2025, Kinaxis’s remaining performance obligation (RPO) was $812 million, which is equivalent to 20 months of revenue. Its average recurring revenue (ARR) increased 14% year over year to $372 million.
How has Kinaxis stock performed in the past few years?
Kinaxis’s stock performance seems cyclical. The stock had performance bumps where its share price rallied unprecedently in just a few months but couldn’t sustain the peak price.
- It jumped 110% in just four months after the pandemic lockdown (March 20, 2020 – July 24, 2020).
- Another 69% jump came between June and November 2021 during the second wave.
- A 30% jump came between June and August 2022 when Russia faced trade sanctions from the world.
Like this, there were bumps of a 20-30% jump.
The stock’s last five-year performance analysis shows that it tends to rise amid trade disruption or supply chain crisis. And if you think logically, Kinaxis offers data-driven strategy planning. Companies go back to the drawing board and run simulations when there is a disturbance in trade or the supply chain.
Given that the only way to access this solution is by subscription, the demand may likely surge amid supply chain challenges and may remain stable in normal times.
Why can’t the stock sustain its rally?
I looked at the last 10 years of revenue and earnings per share (EPS) of Kinaxis and found significant revenue growth in years of supply chain issues.
| Year | Kinaxis Revenue (US$ Millions) | YoY Growth | EPS |
| 2015 | $91.27 | 30% | $0.52 |
| 2016 | $115.95 | 27% | $0.43 |
| 2017 | $133.32 | 15% | $0.80 |
| 2018 | $150.73 | 13% | $0.55 |
| 2019 | $191.55 | 27% | $0.88 |
| 2020 | $224.89 | 17% | $0.51 |
| 2021 | $250.72 | 11% | -$0.04 |
| 2022 | $366.89 | 46% | $0.72 |
| 2023 | $426.97 | 16% | $0.35 |
| 2024 | $483.10 | 13% | $0.00 |
It is safe to assume that the 2025 tariff war could bring a 25-30% revenue growth in 2026. Why 2026? Because of the timing of the revenue recognition.
The United States-China trade war in the second half of 2018 drove Kinaxis’s revenue up 27% in 2019.
How does the next five years look for Kinaxis?
In the last five years, Kinaxis stock only surged 17%, underperforming the TSX Composite Index, which surged 76%. The poor performance is because we took the base in May 2020 when it had already climbed its cyclical rally. If you compare it with January 2020, the stock has surged 96%.
The revenue bumps have resulted in a 10-year revenue compounded annual growth rate of 18%. If the tariff war brings structural changes in the supply chain, Kinaxis could see two straight years of high revenue growth. Otherwise, an 11-13% revenue growth rate is likely.
However, the stock performance could continue to remain cyclical as its high operating expenses (80% of revenue) keep earnings per share volatile.
What should you do?
The stock is trading at an 8.24 times price-to-sales ratio, which means investors have priced in higher revenue growth. Even the forward price-to-earnings ratio of 41.67 times is high from its previous 32. Avoid buying this stock in the current rally. You could add it to the watchlist and buy the stock when it falls in the $155-$160 range to benefit from cyclical jumps.
