tiprankstipranks
Trending News
More News >
Thinkific Labs (TSE:THNC)
TSX:THNC

Thinkific Labs (THNC) AI Stock Analysis

Compare
33 Followers

Top Page

TS

Thinkific Labs

(TSX:THNC)

Rating:62Neutral
Price Target:
C$2.50
▲(2.04%Upside)
Thinkific Labs' overall score is primarily driven by its strong revenue growth and improved cash flow management. However, persistent profitability issues and high valuation metrics present significant challenges. Positive corporate events reflect strategic efforts to boost market perception and stakeholder relations, providing some support to the overall score.
Positive Factors
Payments Expansion
Commerce penetration expanded to 52% of GMV, up from 47% in Q3/24.
Strategic Focus
Thinkific Labs is shifting its focus upmarket towards larger, more-established customers, which may ultimately drive better revenue growth and profitability.
Valuation
There is limited downside to the share price given Thinkific Labs' depressed EV/sales valuation and its ability to generate positive free cash flow.
Negative Factors
Guidance
Q1/25 guidance was below consensus, reflecting a potential short-term impact due to the company's strategic transition.
Subscription Revenue
A more constructive view requires seeing stronger growth in Thinkific Labs' subscription revenue.

Thinkific Labs (THNC) vs. iShares MSCI Canada ETF (EWC)

Thinkific Labs Business Overview & Revenue Model

Company DescriptionThinkific Labs Inc. develops, markets, and supports cloud-based platform in Canada, the United States, and internationally. The company's platform enables entrepreneurs and established businesses to create, market, sell, and deliver online courses and other learning products. The company was incorporated in 2012 and is headquartered in Vancouver, Canada.
How the Company Makes MoneyThinkific Labs generates revenue primarily through a subscription-based model, offering various pricing tiers to cater to different user needs and scales. The company provides a free basic plan with limited features, while its premium plans offer advanced functionalities such as custom domains, advanced course pricing options, and enhanced analytics. Additionally, Thinkific earns money through transaction fees on sales made via its platform. Significant partnerships with payment processors and digital marketing tools also contribute to its earnings, enhancing the platform's capabilities and user reach. The company's focus on continuous product innovation and customer support further bolsters its revenue streams by attracting and retaining a broad client base.

Thinkific Labs Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q3-2024)
|
% Change Since: -9.93%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong growth in key areas such as Thinkific Plus and Commerce adoption. While Self Serve ARR growth was flat, the company showed positive financial performance with increased revenue and EBITDA. Strategic investments and new board members indicate a commitment to future growth.
Q3-2024 Updates
Positive Updates
Growth in Thinkific Plus and Self Serve
Thinkific Plus revenue growth accelerated to 32% with record new customer bookings. Self Serve revenue grew by 10% year-over-year.
Increase in Thinkific Commerce Adoption
Commerce revenue was up 88% from the prior year, with GMV penetration increasing to 47% from 40% in the prior quarter.
Improved ARPU and Revenue
ARPU increased by 13% to $165 per month, and Q3 2024 revenue was $17.2 million, up 15% from the prior year.
Positive EBITDA and Cash Flow
Adjusted EBITDA was $930,000, with positive cash flow from operations of $2.5 million.
Strategic Investments and Board Additions
The company completed a headcount increase in the Plus sales team and added new members to the board of directors.
Negative Updates
Flat Self Serve ARR
Self Serve ARR was relatively flat quarter-over-quarter, indicating stabilization rather than growth.
Minor Challenges with Gateway Fee Introduction
The introduction of the gateway fee did not result in significant churn, but it caused some minor issues.
Company Guidance
During Thinkific's Q3 2024 earnings call, the company provided a positive outlook, highlighting several key metrics. Revenue for Q3 reached $17.2 million, marking a 15% increase from the previous year, driven by significant growth in both Thinkific Plus and Self Serve segments. The company achieved a penetration rate of 47% in Thinkific Commerce, up from 40% the prior quarter, while Plus revenue grew by 32%, aided by record new customer bookings. Gross payments volume (GPV) surged to $52.4 million, a 50% year-over-year increase. Additionally, the company maintained an adjusted EBITDA margin of 5.4% and reported a solid cash position of $50 million. Looking ahead, Thinkific projected Q4 revenue between $17.6 million and $17.9 million, reflecting a continuation of growth trends.

Thinkific Labs Financial Statement Overview

Summary
Thinkific Labs displays strong revenue growth and improving cash flow metrics, indicating positive future potential. However, persistent net losses and high operational costs affect profitability. The balance sheet is stable with low leverage, but declining assets and equity suggest challenges in capital management.
Income Statement
60
Neutral
Thinkific Labs has shown strong revenue growth over recent years, increasing from $21 million in 2020 to $66 million in 2024, indicating a positive growth trajectory. However, the company consistently reports negative EBIT and net income, which impacts profitability. Gross profit margins are healthy at approximately 75%, but significant operating losses suggest high operational costs.
Balance Sheet
55
Neutral
The balance sheet reflects a solid equity base with stockholders' equity at $41.6 million in 2024. The debt-to-equity ratio is low, demonstrating conservative leverage. However, the decline in total assets and equity from 2023 to 2024 suggests potential challenges in asset management and capital retention.
Cash Flow
65
Positive
Thinkific Labs has improved its free cash flow position, turning from negative in 2023 to a positive $6.7 million in 2024, highlighting strong cash flow management. Operating cash flow has also turned positive, although the company previously faced cash flow deficits. This improvement suggests better operational efficiency and cost control.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
45.09M66.94M59.05M51.48M38.12M21.07M
Gross Profit
33.86M50.31M44.56M39.11M29.21M16.62M
EBIT
-36.65M-2.44M-13.54M-30.94M-24.31M-1.47M
EBITDA
-35.80M-1.06M-9.26M-30.44M-23.63M-1.19M
Net Income Common Stockholders
-45.65M-237.00K-9.78M-41.90M-28.44M-1.11M
Balance SheetCash, Cash Equivalents and Short-Term Investments
87.31M49.49M86.61M93.85M126.05M9.07M
Total Assets
97.04M61.37M97.79M102.97M132.40M12.94M
Total Debt
875.00K1.77M1.03M1.96M875.26K1.36M
Net Debt
-86.44M-47.72M-85.58M-91.89M-125.18M-7.70M
Total Liabilities
18.20M19.77M15.85M15.12M10.79M7.63M
Stockholders Equity
78.84M41.59M81.94M87.85M121.61M5.31M
Cash FlowFree Cash Flow
-31.95M6.75M-5.44M-27.11M-18.91M2.34M
Operating Cash Flow
-30.32M6.99M-5.43M-25.85M-18.26M2.63M
Investing Cash Flow
-1.63M-166.00K53.37K-1.26M-655.16K-289.80K
Financing Cash Flow
-299.39K-42.60M-2.41M-241.18K138.26M3.15M

Thinkific Labs Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.45
Price Trends
50DMA
2.85
Negative
100DMA
2.96
Negative
200DMA
2.99
Negative
Market Momentum
MACD
-0.06
Positive
RSI
50.79
Neutral
STOCH
24.24
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:THNC, the sentiment is Negative. The current price of 2.45 is below the 20-day moving average (MA) of 2.53, below the 50-day MA of 2.85, and below the 200-day MA of 2.99, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 50.79 is Neutral, neither overbought nor oversold. The STOCH value of 24.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:THNC.

Thinkific Labs Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$11.81B10.34-7.44%2.91%7.41%-7.93%
62
Neutral
C$166.58M110.862.02%16.58%
$7.23B11.4015.87%3.71%
$8.74B61.7210.66%
TSKXS
73
Outperform
C$5.60B402.422.32%15.14%-31.45%
63
Neutral
C$2.16B-33.64%23.95%39.68%
$800.76M35.4541.12%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:THNC
Thinkific Labs
2.45
0.20
8.89%
OTEX
Open Text
27.89
0.63
2.31%
DSGX
The Descartes Systems Group
102.25
10.07
10.92%
TSE:KXS
Kinaxis Inc
198.11
48.44
32.36%
TSE:LSPD
Lightspeed POS Inc
15.75
-5.01
-24.13%
DCBO
Docebo
27.00
-11.00
-28.95%

Thinkific Labs Corporate Events

Business Operations and Strategy
Thinkific to Engage with Investors at CIBC Conference
Positive
May 20, 2025

Thinkific Labs Inc. announced its participation in the CIBC Technology & Innovation Conference on May 22, 2025, where Founder and CEO Greg Smith will engage in a fireside chat and host meetings with investors. This participation highlights Thinkific’s active engagement with the investment community, potentially enhancing its industry positioning and stakeholder relations.

The most recent analyst rating on (TSE:THNC) stock is a Buy with a C$5.00 price target. To see the full list of analyst forecasts on Thinkific Labs stock, see the TSE:THNC Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Thinkific Reports Strong Q1 2025 Financial Results with 12% Revenue Growth
Positive
May 6, 2025

Thinkific Labs Inc. reported a strong start to 2025 with a 12% year-over-year increase in revenue, reaching $17.8 million in the first quarter. The company saw significant growth in its commerce and subscription revenues, attributed to improvements in customer onboarding and a focused strategy. Thinkific’s financial performance was bolstered by a net income of $0.4 million, a notable improvement from the previous year’s loss, and a consistent gross margin of 74%. The company also maintained a robust cash flow from operations, highlighting the resilience of its financial model. Operationally, Thinkific was recognized for its customer service and education software products, and it launched an integration with HubSpot, enhancing its enterprise-grade solutions.

Delistings and Listing ChangesBusiness Operations and Strategy
Thinkific Completes Share Conversion to Streamline Equity Structure
Positive
Apr 25, 2025

Thinkific Labs Inc. has completed a capital reorganization that converts all Multiple Voting Shares into Single Voting Common Shares, which will trade on the Toronto Stock Exchange under the same symbol. This move is expected to streamline the company’s share structure and potentially enhance market perception, impacting stakeholders positively by simplifying the equity framework.

Business Operations and Strategy
Thinkific Simplifies Share Structure to Enhance Shareholder Value
Positive
Apr 14, 2025

Thinkific Labs Inc. has announced the conversion of its Multiple Voting Shares into Single Voting Common Shares, effectively eliminating its dual-class share structure. This strategic move aims to align voting rights with economic interests, reflecting the company’s commitment to shareholder equality and governance best practices. The change is expected to enhance shareholder value by increasing public float and liquidity, demonstrating Thinkific’s confidence in its growth trajectory and dedication to maximizing long-term value for shareholders.

Financial Disclosures
Thinkific to Announce Q1 2025 Financial Results
Neutral
Apr 9, 2025

Thinkific Labs Inc. announced it will release its first quarter 2025 financial results on May 6, 2025, after market close. The company will host a conference call and webcast to discuss the financial and operational results, reflecting its ongoing commitment to transparency and engagement with stakeholders.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.