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D2L
(TSX:DTOL)
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Rating:67Neutral
Price Target:
C$11.00
▲(7.63% Upside)
Action:Reiterated
Date:09/11/26
The score is driven primarily by solid financial stability and cash generation with low balance-sheet risk, complemented by constructive (but not strong) near-term technical momentum. This is tempered by an expensive valuation (very high P/E) and earnings-call-flagged near-term margin/cash-flow headwinds despite reiterated guidance and an expected H2 improvement.
Positive Factors
Recurring revenue growth
Growth in subscription revenue and ARR strengthens the predictability of D2L’s SaaS model and indicates continued customer demand for Brightspace. Recurring contracts provide a durable base for retention, expansion, and reinvestment across education and workforce markets over the coming quarters.
Negative Factors
Slowing growth and weaker profitability
The reversal from historical revenue growth to a TTM decline, alongside sharply lower net margins, shows that current earnings are less resilient than in prior years. Slower expansion limits operating leverage, while thin profitability leaves less room for execution setbacks or cost increases.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue growth
Growth in subscription revenue and ARR strengthens the predictability of D2L’s SaaS model and indicates continued customer demand for Brightspace. Recurring contracts provide a durable base for retention, expansion, and reinvestment across education and workforce markets over the coming quarters.
Read all positive factors
D2L (DTOL) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$526.98M
Dividend YieldN/A
Average Volume (3M)34.23K
Price to Earnings (P/E)249.5
Beta (1Y)1.34
Revenue Growth2.69%
EPS Growth-95.11%
CountryCA
Employees1,000
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)0.03
Shares Outstanding25,150,068
10 Day Avg. Volume32,580
30 Day Avg. Volume34,228
Financial Highlights & Ratios
PEG Ratio-0.74
Price to Book (P/B)5.18
Price to Sales (P/S)1.97
P/FCF Ratio10.16
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.63Price Target Upside13.75% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.25
Revenue Forecast (FY)C$233.28M
D2L Business Overview & Revenue Model
Company Description
D2L Inc. provides cloud-based learning software for higher education institutions, kindergarten to grade 12 schools and districts, and private sector enterprises in Canada, the United States, and internationally. The company provides personalized,...
How the Company Makes Money
D2L primarily makes money by selling access to its Brightspace learning platform on a subscription (software-as-a-service) basis. Customers (school districts, colleges/universities, and enterprises) pay recurring fees—typically tied to contract te...
D2L Earnings Call Summary
Earnings Call Date:Jun 09, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 09, 2026
Earnings Call Sentiment Positive
The call conveyed a constructive growth story: recurring revenue and ARR expanded, international and core markets showed strong momentum, AI (D2L Lumi) adoption is accelerating, and the company has a healthy cash position and active buyback program. Near-term headwinds include margin pressure from a database migration, a meaningful Q1 operating cash outflow and some K-12 churn, but management expects those issues to largely normalize by the end of Q2 and reiterated guidance with anticipated H2 improvement.Positive Updates
Revenue and ARR Growth
Total revenue increased 8% year-over-year to $57.1 million; subscription and support revenue grew 10% to $52.7 million. Annual recurring revenue (ARR) rose 9% to $225.2 million.
Negative Updates
Adjusted EBITDA and Margin Compression
Adjusted EBITDA decreased to $8.3 million (14.5% margin) from $9.3 million (17.6% margin) in the prior year period. Adjusted gross margin was 70.7% versus 71.3% a year ago (about a 60 bps decline). Management attributes much of the margin pressure to an ongoing database technology migration (estimated 100–150 bps impact in Q1) that should materially conclude by end of Q2.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue and ARR Growth
Total revenue increased 8% year-over-year to $57.1 million; subscription and support revenue grew 10% to $52.7 million. Annual recurring revenue (ARR) rose 9% to $225.2 million.
Read all positive updates
Company Guidance
Management reiterated fiscal 2027 guidance, saying they expect revenue growth and adjusted EBITDA margin to improve as the year progresses with stronger H2 versus H1 and positioning the business for accelerating revenue growth and margin expansion into fiscal 2028; they noted the database migration margin headwind (100–150 bps at its peak) should materially conclude by end of Q2, Fusion will carry roughly a $1.5M Q2 net cost, and free cash flow historically tracks adjusted EBITDA. As context, Q1 results included total revenue of $57.1M (+8% YoY), subscription & support $52.7M (+10%), ARR $225.2M (+9%; ~13% ex‑K‑12), adjusted gross profit $40.4M (70.7% margin), adjusted EBITDA $8.3M (14.5% margin), net income $1.7M, cash ≈$100M with no debt, operating cash used $16.8M and free cash flow –$16.9M; management also highlighted growth drivers (international ARR 15%+ YoY, ARR from higher‑ed/corporate/international ~+13% YoY, D2L Lumi attached to >40% of new higher‑ed deals) and continued share buybacks (≈444k SVS repurchased in Q1; ~1.3M SVS, or 4.2%, over trailing 12 months) plus a $20M CAD substantial issuer bid.D2L Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
74
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 222.59M | 221.76M | 205.28M | 182.38M | 168.40M | 151.88M |
| Gross Profit | 151.67M | 151.87M | 139.96M | 122.20M | 107.77M | 87.95M |
| EBITDA | 19.76M | 19.04M | 14.57M | 295.44K | -12.98M | -94.02M |
| Net Income | 1.65M | 9.14M | 25.72M | -3.54M | -18.38M | -97.65M |
Balance Sheet | ||||||
| Total Assets | 227.21M | 249.82M | 232.92M | 197.12M | 176.61M | 179.21M |
| Cash, Cash Equivalents and Short-Term Investments | 106.40M | 118.21M | 99.18M | 116.94M | 110.73M | 114.68M |
| Total Debt | 10.75M | 11.66M | 11.18M | 12.71M | 13.01M | 1.89M |
| Total Liabilities | 157.78M | 165.55M | 148.18M | 140.24M | 122.52M | 112.83M |
| Stockholders Equity | 69.44M | 84.27M | 84.75M | 56.88M | 54.09M | 66.38M |
Cash Flow | ||||||
| Free Cash Flow | 46.77M | 43.01M | 26.98M | 9.93M | 107.00K | -683.71K |
| Operating Cash Flow | 47.83M | 43.80M | 27.90M | 15.66M | 3.78M | 112.25K |
| Investing Cash Flow | -7.89M | -6.19M | -34.33M | -8.52M | -3.67M | -10.22M |
| Financing Cash Flow | -32.83M | -19.46M | -8.57M | -748.72K | -1.63M | 79.08M |
D2L Technical Analysis
Neutral
10.22
Price Trends
9.86
Positive
9.75
Positive
10.59
Negative
Market Momentum
0.16
Negative
51.77
Neutral
49.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DTOL, the sentiment is Neutral. The current price of 10.22 is above the 20-day moving average (MA) of 9.83, above the 50-day MA of 9.86, and below the 200-day MA of 10.59, indicating a neutral trend. The MACD of 0.16 indicates Negative momentum. The RSI at 51.77 is Neutral, neither overbought nor oversold. The STOCH value of 49.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:DTOL.
D2L Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | C$806.00M | 20.33 | 113.64% | ― | 11.23% | 65.79% | |
67 Neutral | C$526.98M | 249.53 | 2.01% | ― | 2.69% | -95.11% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
59 Neutral | C$88.31M | -69.95 | -2.12% | ― | 4.37% | -237.23% | |
47 Neutral | C$20.61M | 0.68 | 50.83% | ― | ― | ― |
* Technology Sector Average
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D2L
10.00
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.