D2L (DTOL) AI Stock Analysis

• Market Cap: C$785.56M
• Dividend Yield: N/A
• Average Volume (3M): 50.01K
• Price to Earnings (P/E): 18.4
• Beta (1Y): 1.29
• 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: 27,276,320
• 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$20.57
• Price Target Upside: 43.65% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: C$15.50 ▲(8.24% 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

International Market Growth

Strong international ARR growth indicates successful global expansion, enhancing revenue diversification and reducing reliance on domestic markets.

Cash Flow and Financial Position

A strong cash position and no debt provide financial flexibility for strategic investments and cushion against economic downturns.

AI Product Adoption

The growing adoption of Lumi reflects successful innovation and potential for future revenue streams, enhancing D2L's competitive edge.

Negative Factors

Higher Churn in U.S. K-12 Market

Increased churn in a key market segment could hinder revenue stability and growth, necessitating strategic adjustments to regain market share.

Professional Services Revenue Decline

A significant decline in professional services revenue may indicate reduced demand and affect overall profitability, requiring service model reassessment.

Gross Margin Decrease

Decreased gross margins from migration costs could pressure profitability until efficiencies are realized, impacting near-term financial performance.

D2L Business Overview & Revenue Model

Company Description

D2L (Desire2Learn) is a leading provider of educational technology solutions, primarily focusing on the development and delivery of cloud-based learning management systems (LMS). The company serves K-12 schools, higher education institutions, and corporate learning environments, offering a suite of products designed to enhance teaching and learning experiences. D2L's core product, Brightspace, enables educators to create, manage, and deliver personalized learning experiences, leveraging analytics and adaptive learning technologies to improve student engagement and outcomes.

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 exhibits strong revenue growth and improving profitability, with a stable balance sheet and low leverage. 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	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: 14.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• 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 Negative. The current price of 14.32 is below the 20-day moving average (MA) of 15.56, below the 50-day MA of 16.68, and below the 200-day MA of 15.65, indicating a bearish trend. The MACD of -0.77 indicates Positive momentum. The RSI at 32.48 is Neutral, neither overbought nor oversold. The STOCH value of 24.17 is Neutral, 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
CMG	69 Neutral	C$427.71M	20.68	25.64%	2.33%	3.19%	-1.07%
DTOL	68 Neutral	C$785.56M	18.37	45.71%	―	10.85%	384.10%
DCBO	63 Neutral	C$868.65M	28.83	49.99%	―	16.25%	31.71%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
THNC	56 Neutral	C$122.23M	323.21	0.65%	―	14.05%	-62.16%
TIXT	55 Neutral	―	―	-20.44%	―	5.06%	-638.59%
CVO	54 Neutral	C$669.11M	-22.14	-18.09%	―	12.20%	-8.46%

D2L Corporate Events

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.