D2L (DTOL) AI Stock Analysis

• Market Cap: C$485.35M
• Dividend Yield: N/A
• Average Volume (3M): 50.01K
• Price to Earnings (P/E): 38.8
• Beta (1Y): 1.11
• 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: 27,081,697
• 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$13.88
• Price Target Upside: 55.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 0.41
• Revenue Forecast (FY): C$234.72M

• Rating: 68 Neutral
• Price Target: C$11.00 ▲(23.60% Upside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is supported primarily by strong financial performance (improving margins and free cash flow) and reasonably supportive valuation. These positives are tempered by weak technical momentum (oversold and below key moving averages) and a mixed earnings-call outlook due to U.S. K-12 churn and near-term margin pressure despite steady guidance and international/AI progress.

Positive Factors

Recurring SaaS revenue growth

Sustained subscription and ARR growth strengthens a predictable recurring revenue base, improving cash visibility and reducing top-line volatility. Multi‑year contracts and renewals support investment in product, sales and international expansion, reinforcing durable revenue scalability.

Improving margin profile

Material improvement in gross and net margins signals better cost control and operating leverage as ARR scales. Higher margins provide internal capital for R&D and go‑to‑market, increase resilience to pricing pressures, and make long‑term margin sustainability more credible.

Strong cash generation & liquidity

Robust FCF growth and efficient operating cash conversion enhance financial flexibility for product investment and absorb cyclical variability. Healthy cash generation reduces refinancing risk and supports strategic initiatives like international expansion and AI product development.

Negative Factors

U.S. K‑12 churn

Elevated churn in the large K‑12 cohort erodes a meaningful portion of ARR and weakens retention-driven growth. If driven by structural shifts (leadership changes, classroom reopening), it can depress lifetime value, increase sales costs to replace lost accounts, and slow durable ARR expansion.

Decline in professional services

A sharp drop in services revenue reduces an important channel for onboarding, integrations and upsells. Lower services activity can slow product adoption, limit expansion within accounts, and shift revenue mix toward lower near‑term implementation-driven growth, pressuring long‑term account penetration.

Margin pressure from tech migration

Significant one‑time migration costs and a measurable gross margin decline indicate near‑term profit dilution and execution risk. Extended timing for benefits (fiscal 2028) implies prolonged investment and uncertainty, constraining free cash flow uplift and margin expansion in the medium term.

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

Strong overall fundamentals: solid revenue growth, improving profitability (notably net margin), and robust free cash flow generation. Balance sheet leverage is low, but prior periods of instability and higher leverage remain a risk to monitor.

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	Jan 2024	Jan 2023	Jan 2022	Jan 2022	Jan 2021
Income Statement
Total Revenue	214.99M	205.28M	182.38M	168.40M	151.88M	126.37M
Gross Profit	147.35M	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	30.20M	25.72M	-3.54M	-18.38M	-97.65M	-41.50M
Balance Sheet
Total Assets	237.85M	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	11.03M	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: 8.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 8.9 is below the 20-day moving average (MA) of 9.76, below the 50-day MA of 11.06, and below the 200-day MA of 14.81, indicating a bearish trend. The MACD of -0.57 indicates Negative momentum. The RSI at 25.20 is Positive, neither overbought nor oversold. The STOCH value of 17.27 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
DCBO	74 Outperform	C$785.27M	16.69	73.40%	―	16.25%	31.71%
ELL	69 Neutral	C$2.85M	-2.33	8.66%	―	4.74%	4.00%
DTOL	68 Neutral	C$485.35M	38.77	45.71%	―	10.85%	384.10%
THNC	63 Neutral	C$95.63M	73.32	0.65%	―	14.05%	-62.16%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GEC	47 Neutral	C$23.26M	-104.71	―	―	―	―