D2L (DTOL) AI Stock Analysis

• Market Cap: C$592.79M
• Dividend Yield: N/A
• Average Volume (3M): 50.01K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 1.23
• Revenue Growth: 10.85%
• EPS Growth: 384.10%
• Country: CA
• Employees: 1,000
• Sector: Technology
• Sector Strength: 88
• Industry: Education & Training Services
• EPS (TTM): 0.11
• Shares Outstanding: 27,143,583
• 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$20.33
• Price Target Upside: 87.03% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: C$12.00 ▲(10.40% Upside)

D2L's overall score reflects strong financial performance and reasonable valuation, offset by bearish technical indicators and mixed earnings call sentiment. The company's robust cash flow and international growth are positive, but challenges in the U.S. market and technical weakness weigh on the score.

Positive Factors

Revenue and margin improvement

Sustained top-line growth and materially improved gross and net margins indicate the SaaS platform is scaling efficiently. Higher margins reflect durable operating leverage in subscription economics, supporting reinvestment into product, sales, and long-term profitability.

Strong cash generation and low leverage

A debt-free balance sheet with sizable cash and rising free cash flow provides resilience and optionality. This durable financial strength supports product R&D, international expansion, and ability to weather churn or invest in strategic M&A without compromising operations.

International ARR expansion and competitive wins

Above-market international ARR growth and a >50% win rate indicate real competitive differentiation and geographic diversification. This reduces dependence on any single market and underpins sustainable ARR expansion and pricing power across higher-education and corporate segments.

Negative Factors

Higher churn in U.S. K-12 market

Losing ~12% of ARR in a core segment reflects a structural headwind from leadership shifts and reversion to traditional models. Persistent churn weakens net retention, forces higher new-sales spend to maintain ARR, and undermines long-term unit economics in a key customer cohort.

Decline in professional services revenue

A steep drop in services revenue reduces a channel for customer onboarding, expansion, and stickiness. Lower implementation and services engagement can slow product adoption, impair upsell dynamics, and make it harder to capture lifetime value from subscription customers over time.

Technology migration hit to margins and timing risk

Large migration costs that pressure gross margins for multiple years create execution and timing risk. Delayed benefits to 2028 mean near-term margin compression and capital deployment, challenging sustained margin improvement and requiring careful implementation to realize promised long-term gains.

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 has demonstrated strong revenue growth and improved profitability, with a net profit margin of 14.57% and a gross profit margin of 69.25%. The balance sheet is healthy with a low debt-to-equity ratio of 0.14, and cash flow is robust with a 51.62% growth in free cash flow. However, historical financial instability and leverage need monitoring.

Income Statement

D2L has demonstrated strong revenue growth with a TTM increase of 9.63% and a consistent upward trend over the past few years. The gross profit margin has improved to 69.25% in TTM, indicating efficient cost management. The net profit margin has also improved significantly to 14.57% in TTM, reflecting enhanced profitability. EBIT and EBITDA margins have shown positive trends, indicating operational efficiency improvements.

Balance Sheet

The balance sheet shows a healthy debt-to-equity ratio of 0.14 in TTM, suggesting manageable leverage. Return on equity has improved to 39.80% in TTM, indicating strong profitability relative to shareholder equity. The equity ratio remains stable, reflecting a solid capital structure. However, past periods showed higher leverage and negative equity, which could pose risks if not managed carefully.

Cash Flow

D2L's cash flow statement reflects robust free cash flow growth of 51.62% in TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is healthy, suggesting efficient conversion of earnings to cash. The free cash flow to net income ratio is nearly 1, indicating effective cash management. Historical fluctuations in free cash flow growth highlight potential volatility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	235.95M	205.28M	182.38M	168.40M	151.88M	126.37M
Gross Profit	161.70M	139.96M	122.20M	107.77M	87.95M	77.08M
EBITDA	22.28M	14.57M	295.44K	-12.98M	-94.02M	-37.94M
Net Income	31.90M	25.72M	-3.54M	-18.38M	-97.65M	-41.50M
Balance Sheet
Total Assets	333.26M	232.92M	197.12M	176.61M	179.21M	85.70M
Cash, Cash Equivalents and Short-Term Investments	154.76M	99.18M	116.94M	110.73M	114.68M	45.22M
Total Debt	15.45M	11.18M	12.71M	13.01M	1.89M	182.30M
Total Liabilities	150.34M	148.18M	140.24M	122.52M	112.83M	272.99M
Stockholders Equity	87.51M	84.75M	56.88M	54.09M	66.38M	-187.29M
Cash Flow
Free Cash Flow	36.05M	26.98M	9.93M	107.00K	-683.71K	14.91M
Operating Cash Flow	37.02M	27.90M	15.66M	3.78M	112.25K	16.58M
Investing Cash Flow	-13.44M	-34.33M	-8.52M	-3.67M	-10.22M	-1.68M
Financing Cash Flow	-18.73M	-8.57M	-748.72K	-1.63M	79.08M	-2.14M

D2L Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.87
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:DTOL, the sentiment is Negative. The current price of 10.87 is below the 20-day moving average (MA) of 12.28, below the 50-day MA of 14.14, and below the 200-day MA of 15.30, indicating a bearish trend. The MACD of -0.92 indicates Positive momentum. The RSI at 18.60 is Positive, neither overbought nor oversold. The STOCH value of 16.04 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:DTOL.

D2L Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ELL	69 Neutral	C$2.85M	10.26	8.66%	―	4.74%	4.00%
DTOL	68 Neutral	C$592.79M	13.95	45.71%	―	10.85%	384.10%
THNC	65 Neutral	C$138.08M	362.50	0.65%	―	14.05%	-62.16%
DCBO	63 Neutral	C$765.21M	25.17	49.99%	―	16.25%	31.71%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GEC	47 Neutral	C$25.32M	-7.07	―	―	―	―