Analyst Thanos Moschopoulos of BMO Capital maintained a Hold rating on D2L, with a price target of C$20.00.
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Thanos Moschopoulos has given his Hold rating due to a combination of factors including D2L’s recent financial performance and market conditions. The company reported better-than-expected revenue and EBITDA for Q2/26, and management has increased its subscription revenue guidance while maintaining its overall revenue and EBITDA outlook. Despite these positive indicators, Moschopoulos notes that the spending environment remains challenging, which could limit the potential for multiple expansion unless there is a more optimistic outlook for end markets and stronger annual recurring revenue growth.
Additionally, while D2L is performing well in its core higher education market and has seen success with AI product monetization, the growth in annual recurring revenue has decelerated compared to previous quarters. The analyst acknowledges the company’s strong competitive position and improved sales pipeline, but also points out that extended sales cycles and higher churn in certain segments, such as U.S. K-12, present challenges. Overall, while D2L’s valuation appears attractive relative to its growth rate, the preference is to focus on growth over value when considering small-cap SaaS companies, leading to a Hold rating.