Kainos Group (LON:KNOS) Releases Quarterly Earnings Results

Kainos Group (LON:KNOS) released its quarterly earnings results on Monday. The company reported GBX 27.70 EPS for the quarter, Digital Look Earnings reports. Kainos Group had a net margin of 9.86% and a return on equity of 41.45%. The business had revenue of £268.80 million for the quarter.

Here are the key takeaways from Kainos Group’s conference call:

• Strong growth across the business: Revenue rose 37% and adjusted profit increased 30%, with Digital Services revenue up 57% and Workday Services up 9%.
• Backlog supports near-term visibility: Contracted backlog reached £853 million, up 26%; two large Digital Services contracts worth £196 million are expected to be signed in the coming weeks and could take group backlog above £1 billion.
• Margins were held back by rapid growth: Adjusted PBT margin declined 0.8 percentage points, as a greater mix of lower-margin Digital Services and increased contractor and partner use weighed on gross margin. Management said replacing contractors with employees as growth moderates could support future margin expansion.
• Products and AI offer growth opportunities, with adoption still developing: Workday Products ARR grew 24%, and the company expects to pass £100 million of ARR soon; AI-related revenue rose 40% to £29 million. Management noted that most customer AI activity remains at the pilot stage and described its new Actonomy business as early-stage.

Kainos Group Price Performance

Kainos Group stock traded down GBX 153 during trading hours on Monday, reaching GBX 1,077. 909,223 shares of the stock were exchanged, compared to its average volume of 2,543,336. The company has a market cap of £1.24 billion, a P/E ratio of 30.68, a price-to-earnings-growth ratio of 2.15 and a beta of 0.87. The company has a current ratio of 1.17, a quick ratio of 1.59 and a debt-to-equity ratio of 6.11. Kainos Group has a twelve month low of GBX 686 and a twelve month high of GBX 1,360. The stock has a 50 day moving average of GBX 1,243.77 and a two-hundred day moving average of GBX 938.98.

Wall Street Analyst Weigh In

KNOS has been the subject of several analyst reports. Deutsche Bank Aktiengesellschaft lifted their price objective on shares of Kainos Group from GBX 920 to GBX 1,260 and gave the stock a “hold” rating in a research note on Tuesday, August 18th. Berenberg Bank increased their target price on shares of Kainos Group from GBX 1,185 to GBX 1,330 and gave the stock a “buy” rating in a research report on Wednesday, August 19th. Finally, Canaccord Genuity Group raised their target price on shares of Kainos Group from GBX 1,200 to GBX 1,315 and gave the stock a “buy” rating in a report on Wednesday, August 19th. Five equities research analysts have rated the stock with a Buy rating and one has given a Hold rating to the company’s stock. According to data from MarketBeat.com, Kainos Group has an average rating of “Moderate Buy” and an average target price of GBX 1,231.17.

Kainos Group Company Profile

Kainos Group plc engages in the provision of digital technology services in the United Kingdom, Ireland, North America, Central Europe, and internationally. It operates through three segments: Digital Services, Workday Services, and Workday Products. The Digital Services segment develops and supports custom digital service platforms for transforming service delivery in public, commercial, and healthcare sectors. The Workday Services segment provides consulting, project management, integration, and post deployment services for Workday’s software suite, which includes cloud-based software for human capital management, and financial management, and adaptive planning.