D2L (DTOL) AI Stock Analysis

• Market Cap: C$950.20M
• Dividend Yield: N/A
• Average Volume (3M): 50.01K
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.86
• Revenue Growth: 15.43%
• EPS Growth: 6573.55%
• Country: CA
• Employees: 1,000
• Sector: Technology
• Sector Strength: 88
• Industry: Education & Training Services
• EPS (TTM): 0.07
• Shares Outstanding: 27,376,034
• 10 Day Avg. Volume: 35,715
• 30 Day Avg. Volume: 50,006
• PEG Ratio: -0.03
• Price to Book (P/B): 8.35
• Price to Sales (P/S): 3.45
• P/FCF Ratio: 26.24
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$21.00
• Price Target Upside: 20.76% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 77 Outperform
• Price Target: C$19.50 ▲(12.13% Upside)

D2L's strong financial performance and positive earnings call sentiment are the most significant factors driving its score. The company's robust revenue growth and profitability improvements, along with strategic innovations in AI, position it well in the industry. However, technical indicators suggest potential short-term weakness, and valuation metrics indicate moderate attractiveness.

Positive Factors

Revenue Growth

Consistent revenue growth highlights D2L's expanding market reach and successful subscription model, ensuring stable financial performance.

AI and Product Innovation

Innovations in AI and product development enhance D2L's competitive edge, driving customer engagement and long-term growth potential.

Balance Sheet Health

A strong balance sheet with low leverage provides D2L with financial flexibility to invest in growth opportunities and withstand economic fluctuations.

Negative Factors

Decreased Professional Services Revenue

Declining professional services revenue suggests challenges in diversifying income streams, potentially impacting overall revenue stability.

Higher-than-Normal Churn in U.S. K-12 Market

Increased churn in the U.S. K-12 market could signal competitive pressures or customer dissatisfaction, affecting long-term revenue growth.

Decline in Free Cash Flow Growth Rate

A significant decline in free cash flow growth may hinder D2L's ability to fund operations and strategic initiatives, impacting future growth.

D2L Business Overview & Revenue Model

Company Description

D2L Corporation provides an online integrated learning platform for learners in higher education, K–12, healthcare, government, and enterprise sectors. It offers Brightspace, a learning platform that combines usability, integrated analytics, and accessibility practices; Brightspace Learning Object Repository to manage learning objects and share content; Brightspace ePortfolio, which combines social sharing and learning concepts for learners; and Brightspace Insights, a solution to predict, measure, and guide student performance. It also provides Brightspace Degree Compass, a Web-based course recommendation tool that guides students' course selection; Brightspace LeaP, an adaptive learning platform to create individualized online learning experience for students; Brightspace Assignment Grader, an online grading tool that improves productivity and work-life balance; Brightspace Binder, a solution for students to collect, organize, and discover learning content; Brightspace Campus Life, an application that provides students with access to their courses, campus news and updates, upcoming events, and more; and Brightspace Course Catalog, a solution that enables users to search for the list of courses. In addition, it offers Brightspace Capture, a solution to record and broadcast media presentations; Brightspace Binder Shop, a solution for users to discover, evaluate, and recommend e-textbooks for learners; Brightspace Open Courses, an open online learning solution; Brightspace Pulse, an application that helps students to stay up to date and prepared by unifying course calendars, assignments, grades, and news; and D2L Wave, a platform for employees to gain new skills by accessing an online catalog of education options from various educational institutions. The company was founded in 1999 and is headquartered in Kitchener, Canada with locations in Toronto, Winnipeg, and Richmond, Canada; Towson, Maryland; Melbourne, Australia; London, United Kingdom; Brazil; and Singapore.

How the Company Makes Money

D2L generates revenue primarily through subscription-based licensing of its Brightspace platform. Educational institutions and corporate clients pay for access to the software, with pricing models typically based on the number of users or student enrollments. Additionally, the company offers professional services, such as training, implementation, and ongoing support, which contribute to its revenue streams. D2L has formed strategic partnerships with various educational institutions and organizations, enhancing its market presence and driving customer acquisition. The company also benefits from recurring revenue through long-term contracts with clients, which provides a stable financial foundation.

D2L Financial Statement Overview

Summary

D2L demonstrates strong financial performance with robust revenue growth and improving profitability. The balance sheet is stable with low leverage, and the company effectively utilizes its equity to generate returns. However, the decline in Free Cash Flow Growth Rate suggests potential challenges in cash flow management.

Income Statement

D2L has demonstrated strong revenue growth and improving profitability. The Gross Profit Margin has consistently increased, reaching 69.25% in TTM, indicating efficient cost management. The Net Profit Margin improved significantly to 14.57% in TTM, showcasing enhanced profitability. Revenue growth has been steady, with a 2.67% increase in TTM. The EBIT and EBITDA margins have also improved, reflecting better operational efficiency.

Balance Sheet

The company's balance sheet shows a healthy Debt-to-Equity Ratio of 0.14 in TTM, indicating low leverage and financial stability. Return on Equity is strong at 39.80%, reflecting effective use of equity to generate profits. The Equity Ratio stands at 33.56%, suggesting a solid equity base relative to total assets. Overall, the balance sheet indicates a stable financial position with manageable debt levels.

Cash Flow

D2L's cash flow performance is mixed. While the Free Cash Flow to Net Income ratio is strong at 97.23% in TTM, indicating efficient cash generation relative to net income, the Free Cash Flow Growth Rate has declined by 40.73% in TTM, which could be a concern. The Operating Cash Flow to Net Income ratio is moderate at 16.04%, suggesting room for improvement in cash flow generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	215.22M	205.28M	182.38M	168.40M	151.88M	126.37M
Gross Profit	149.03M	139.96M	122.20M	107.77M	87.95M	77.08M
EBITDA	22.55M	14.57M	295.44K	-12.98M	-94.02M	-37.94M
Net Income	31.36M	25.72M	-3.54M	-18.38M	-97.65M	-41.50M
Balance Sheet
Total Assets	250.19M	232.92M	197.12M	176.61M	179.21M	85.70M
Cash, Cash Equivalents and Short-Term Investments	102.52M	99.18M	116.94M	110.73M	114.68M	45.22M
Total Debt	11.55M	11.18M	12.71M	13.01M	1.89M	4.11M
Total Liabilities	166.21M	148.18M	140.24M	122.52M	112.83M	272.99M
Stockholders Equity	83.98M	84.75M	56.88M	54.09M	66.38M	-187.29M
Cash Flow
Free Cash Flow	23.78M	26.98M	9.93M	107.00K	-683.71K	14.91M
Operating Cash Flow	24.46M	27.90M	15.66M	3.78M	112.25K	16.58M
Investing Cash Flow	-6.30M	-34.33M	-8.52M	-3.67M	-10.22M	-1.68M
Financing Cash Flow	-15.30M	-8.57M	-748.72K	-1.63M	79.08M	-2.14M

D2L Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 17.39
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: 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 17.39 is below the 20-day moving average (MA) of 18.18, below the 50-day MA of 17.62, and above the 200-day MA of 16.20, indicating a neutral trend. The MACD of 0.10 indicates Positive momentum. The RSI at 48.27 is Neutral, neither overbought nor oversold. The STOCH value of 54.91 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DTOL	―	C$950.20M	21.49	45.71%	―	15.43%	6573.55%
DCBO	―	$1.01B	35.54	55.53%	―	18.51%	32.49%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CMG	―	C$460.17M	21.12	27.95%	3.01%	8.53%	-8.25%
THNC	―	C$139.65M	149.64	1.61%	―	16.12%	―
CVO	―	C$703.27M	―	-17.77%	―	10.09%	-8.79%
TIXT	―	$1.65B	―	-20.44%	―	5.06%	-638.59%

D2L Corporate Events

D2L, Inc. Earnings Call: Strong SaaS Growth and Positive Outlook

D2L, Inc. recently held its earnings call, revealing a slightly positive sentiment driven by strong SaaS revenue growth and profitability improvements. Despite challenges in professional services revenue and churn in the U.S. K-12 market, the company showcased robust financial performance and new customer acquisitions, contributing to an overall optimistic outlook.

D2L Inc. Reports Strong Q2 2026 Financial Results with 11% Revenue Growth

D2L Inc. reported a strong financial performance for the second quarter of Fiscal 2026, with total revenue increasing by 11% year-over-year to $54.8 million. The company saw significant growth in subscription and support revenue, which rose by 14% to $50.1 million, and an increase in annual recurring revenue by 7% to $212.6 million. D2L’s adjusted EBITDA also improved, reaching $7.5 million compared to $4.2 million in the previous year. The company achieved a net income of $2.7 million, reversing a loss from the prior year. These results reflect D2L’s successful execution of its innovation agenda, including the launch of new products with transformative AI capabilities, and its focus on securing flagship customers in key markets. Despite a decrease in professional services revenue due to cautious spending in the U.S. market, D2L maintains a strong balance sheet with $102.5 million in cash and no debt.

The most recent analyst rating on (TSE:DTOL) stock is a Buy with a C$18.00 price target. To see the full list of analyst forecasts on D2L stock, see the TSE:DTOL Stock Forecast page.