D2L’s Mixed Financial Signals: Hold Rating Amid Revenue Challenges and Growth Potential

In a report released yesterday, Thanos Moschopoulos from BMO Capital maintained a Hold rating on D2L, with a price target of C$17.00.

Thanos Moschopoulos’s rating is based on several factors influencing D2L’s current financial performance and outlook. The company’s recent quarterly results showed revenue figures that were below expectations, although EBITDA was in line with forecasts. Additionally, D2L has experienced higher churn rates in its K-12 segment, which has negatively impacted its annual recurring revenue (ARR) growth. Despite these challenges, the company is seeing strength in its pipeline across higher education, international markets, and corporate sectors.
While D2L’s valuation appears attractive due to its growth potential and profitability improvements, the company has adjusted its fiscal year 2026 revenue guidance downward. This adjustment reflects not only the K-12 churn but also a softer spending environment in U.S. higher education for professional services. Given these mixed signals, Moschopoulos believes that although there is limited downside risk to the stock, improved ARR growth is necessary for the stock to perform better, leading to a Hold rating.

According to TipRanks, Moschopoulos is a 5-star analyst with an average return of 20.8% and a 59.86% success rate. Moschopoulos covers the Technology sector, focusing on stocks such as Celestica, CGI, and The Descartes Systems Group.