- Stock has rallied more than 30% since 16 June
- Upbeat news from enterprise software partner Workday
- International expansion and market share gains
Shares in digital transformation specialist Kainos (KNOS) have rallied more than 30% since closing at a 2022 low of 954.5p on 16 June. It’s a stellar bounce for a stock that at its low point had lost half its market value this year.
Driving this change in investor mood is confidence in the company’s Workday (WDAY:NASDAQ) practice. Kainos is a leading Workday partner and the only specialist headquartered in the UK.
FLOORING THE WORKDAY ACCELERATOR
Having first engaged with Workday in 2011, Kainos’ Workday practice reported revenue growth for full year 2022 (to 31 Mar) of 41% to £102.8 million, representing 34% of the company’s overall revenue.
This week, the US enterprise applications giant announced that the number of Workday Extend customers has doubled in the past year as more organisations look to leverage the Workday platform to quickly innovate and adapt to an ever-changing landscape. Kainos was specifically mentioned in the press release.
This followed Workday news last week that it was seeing a ‘surge’ in demand for its Adaptive Planning Solution, which provides a scalable platform that supports highly flexible modelling without compromising ease of use.
As a result, the planning process becomes more collaborative across an organisation, helping improve operational efficiency and decision-making, great features for businesses increasingly confronted by workforces operating all over the globe, many from home.
EXPANSION AND MARKET SHARE
Kainos believes it can outpace Workday’s rapid market growth by continuing its international expansion and by replacing other Workday partners in engagements where they are underserving their customers.
Such ambition does not depend on any ‘heroic’ strategic execution by Kainos, say analysts at Shore Cap, but rather on a continuation of the formula that has already delivered five-year revenue compound annual growth rates of 50% from Kainos’ Workday arm.
‘Kainos increased the number of its accredited Workday consultants by 53% in fiscal 2022 to 638, a bold move,’ said Shore Cap.
The firm’s Workday practice saw its workflow backlog surge 46% to £127 million as at 31 March 2022. Kainos’ execution chemistry is increasingly appealing to clients, clearly.
