Canaccord Genuity raises target price on Kainos
Kainos Group
1,030.00p
16:40 10/05/24
Analysts at Canaccord Genuity raised their target price on software firm Kainos from 1,765.0p to 1,880.0p on Monday, pointing to continued growth momentum and normalising margins.
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Canaccord said Kainos, which raised full-year revenue expectations in September, had shown that its "impressive run" of sector-leading double-digit growth had continued in its interim results, with organic sales up 32% year-on-year
Furthermore, the Canadian bank highlighted that backlog growth had accelerated to 38%, of which digital services was up 29% year-on-year, while workday services grew 39% and smart services shot up 67%
"This provides very good visibility on our raised 2H22 estimates, which now imply potentially conservative +21% yoy growth and 26% for the full year," said Canaccord, which reiterated its 'hold' rating on the stock.
"The strong >25% organic revenue growth in our view warrants a premium, but considering muted expected EPS growth this year we see limited scope for multiple expansion."