If you’ve been ignoring the artificial intelligence (AI) buzz thinking it’s too late to find value, you might want to think again. Most investors have their eyes glued to the usual large tech stocks. But while those stocks bounce up and down with any AI-related headlines, some smaller companies are making serious moves without the fanfare by blending AI with practical, everyday solutions. And when done right, this approach could pay off big in the long run.
One Canadian tech firm, Kinaxis (TSX:KXS), seems to be doing just that, and it’s not only delivering on performance, but its stock is still reasonably priced. In this article, I’ll tell you how real innovation, financial discipline, and strong fundamentals make Kinaxis one of the most underrated AI investments on the TSX today.
This AI stock looks too cheap to ignore
If you don’t know it already, the Ottawa-based Kinaxis offers an AI-powered supply chain orchestration platform that helps global businesses navigate everything from strategic planning to last-mile delivery.
KXS stock currently trades at $190.03 per share, giving the company a market cap of about $5.4 billion. Over the last year, the stock has climbed more than 23%, with much of that strength coming in the last six months with the help of growing investor confidence in its recurring revenue and AI-powered software model. Let’s take a closer look.
What’s driving this performance surge
A big reason behind the recent surge in this AI stock is Kinaxis’ strong second-quarter earnings and upward revision to its SaaS (Software-as-a-Service) revenue guidance for 2025. During the quarter, the company’s SaaS revenue jumped 17% YoY (year-over-year), while total revenue rose 15% from a year ago to US$136.4 million.
Beyond top-line growth, its adjusted quarterly EBITDA (earnings before interest, taxes, depreciation, and amortization) also jumped 54% YoY to a record US$33.7 million, with its EBITDA margin expanding to 25% – a clear sign the tech firm is scaling efficiently.
As a result, Kinaxis reported its highest-ever quarterly net profit of US$18.4 million last quarter, reflecting a huge jump from just US$3.4 million a year ago. That’s a 437% YoY increase, driven mainly by its surging subscription revenue and tight cost management.
AI strategy with financial discipline
Unlike some software companies that talk up AI without clear execution, Kinaxis is already seeing a positive response from customers to its new generative and agentic AI features. The company’s tools are designed to create more autonomous and predictive supply chains.
For example, its AI-powered Maestro platform builds on its long-standing RapidResponse engine and takes automation, forecasting, and decision-making to the next level. It combines real-time data integration with AI-powered modeling, which lets supply chain teams plan and react faster than ever.
In fact, some of its customers are already using the Maestro platform to reduce planning time and respond to demand shifts faster, especially in industries like automotive and chemicals.
Why Kinaxis stock looks undervalued
Overall, Kinaxis is consistently focusing on boosting its long-term growth prospects. Its growing customer base and global footprint, especially in Asia through recent partnerships like Tosoh in Japan, add to its long-term growth potential.
In addition, despite all the tech buzz, Kinaxis remains financially disciplined as its cash flow and margins continue to improve. These are some of the key reasons why I consider Kinaxis to be one of the most attractive AI stocks out there that’s not overpriced or overly hyped.
